Preparing Common-Size Income Statements by Using Base Period Horizontal Analysis Scherer Company provided the following income statements for its first 3 years of operation: Scherer Company Income Statements Years of Operation Year 1 Year 2 Year 3 Net sales $990,000 $1,069,200 $1,316,700 Less: Cost of goods sold (296,000) (322,000) (365,000) Gross margin $694,000 $747,200 $951,700 Less: Operating expenses (417,000) (494,000) (599,500) Income taxes (111,000) (119,400) (138,400) Net income $166,000 $133,800 $213,800 Required: Prepare common-size income statements by using Year 1 as the base period. (Note: Enter all amounts as positive numbers, except for a net loss. Enter net loss as a negative number, if applicable. Round answers to the nearest whole percentage.) Scherer Company Common-Size Income Statements Years of Operation Year 1 Year 1 Year 2 Year 2 Year 3 Year 3 Dollars Percentage Dollars Percentage Dollars Percentage Net sales $990,000 1,069,200 $1,316,700 Less: Cost of goods sold (296,000) 322,000) (365,000) Gross margin $694,000 $747,200 $951,700 Less: Operating expenses (417,000) (494,000) (599,500) Income taxes (111,000) (119,400) (138,400) Net income $166,000 $133,800 $213,800Scherer Company provided the following income statements for its first 3 years of operation: Scherer Company Income Statements Years of Operation Year 1 Year 2 Year 3 Net sales $990,000 $1,089,000 $1,287,000 Less: Cost of goods sold (301,000) (323,000) (373,000) Gross margin $689,000 $766,000 $914,000 Less: Operating expenses (424,000) (486,000) (591,500) Income taxes (110,800) (122,000) (137,600) Net income $154,200 $158,000 $184,900 Required: Prepare common-size income statements by using net sales as the base. (Note: Enter all amounts as positive numbers, except for a net loss. Enter net loss as a negative number, if applicable. Round answers to the nearest whole percentage. Percentages may not calculate down.) Scherer Company Common-Size Income Statements Years of Operation Year 1 Year 1 Year 2 Year 2 Year 3 Year 3 Dollars Percentage Dollars Percentage Dollars Percentage Net sales $990,000 % 1,089,000 % $1,287,000 % Less: Cost of goods sold (301,000) (323,000) (373,000) Gross margin $689,000 $766,000 $914,000 Less: Operating expenses (424,000) (486,000) (591,500) Income taxes (110,800) (122,000) (137,600) Net income $154,200 % $158,000 % $184,900 %Calculating the Current Ratio and the Quick (or Acid-Test) Ratio Hannah Company has current assets equal to $3,800,000. Of these, $1,200,000 is cash, $1,800,000 is accounts receivable, $500,000 is inventory, and the remainder is marketable securities. Current liabilities total $1,911,000. Required: Note: Round answers to two decimal places. 1. Calculate the current ratio. 2. Calculate the quick ratio (acid-test ratio).Calculating the Average Accounts Receivable, the Accounts Receivable Turnover Ratio, and the Accounts Receivable Turnover in Days Last year, Dogwood Company had net sales of $9,076,000 and cost of goods sold of $4,812,000. Dogwood had the following balances: January 1 December 31 Accounts receivable $725,000 $775,000 Inventory 450,000 425,000 Required: Note: Round answers to one decimal place. Assume 365 days per year. 1. Calculate the average accounts receivable. 2. Calculate the accounts receivable turnover ratio. times 3. Calculate the accounts receivable turnover in days. daysCalculating the Average Inventory, the Inventory Turnover Ratio, and the Inventory Turnover in Days Last year, Dogwood Company had net sales of $9,375,000 and cost of goods sold of $4,605,000. Dogwood had the following balances: January 1 December 31 Accounts receivable $725,000 $775,000 Inventory 450,000 425,000 Required: Note: Round answers to one decimal place. Assume 365 days per year. 1. Calculate the average inventory. 2. Calculate the inventory turnover ratio. times 3. Calculate the inventory turnover in days. days 4. CONCEPTUAL CONNECTION Based on these ratios, does Nikkola appear to be performing well or poorly? 1. Based on the ratios Nikkola is performing very well. 2. Based on the ratios Nikkola is not performing as expected. 3. Without more detailed information on Nikkola's and its industry, it is difficult to classify these results as outstanding, poor, or somewhere in betweenCalculating the Debt Ratio and the DebttoEquity Ratio Ernst Company's balance sheet shows total liabilities of $32,?86,300, total stockholders' equity of $10,041,000, and total assets of $42,82?,300. Required: 1. Calculate the debt ratio. Round the percentage to two decimal places. :l a. 2. Calculate the debttoequity ratio. Round to two decimal places. :l Calculating the Times-Interest-Earned Ratio Beech Company:r provided the following income statement for last year: Sales $24,35o,?35 Cost of goods sold 15,300,000 Gross margin $9,050,?35 Operating expenses 4,910,505 Operating income $4,140,050 Interest expense 508,015 Income before taxes $3,532,035 ) Income taxes 1,451,214 Net income $2,1F0,021 Required: Calculate the timesinterestearned ratio. Round the answer to one decimal plE S times