Question
Problem 13-1A (Part Level Submission) Here are comparative statement data for Pharoah Company and Cullumber Company, two competitors. All balance sheet data are as of
Problem 13-1A (Part Level Submission)
Here are comparative statement data for Pharoah Company and Cullumber Company, two competitors. All balance sheet data are as of December 31, 2017, and December 31, 2016.
Pharoah Company
Cullumber Company
2017
2016
2017
2016
Net sales$1,924,000$563,000Cost of goods sold1,067,000281,000Operating expenses254,00091,000Interest expense8,0003,000Income tax expense71,70035,000Current assets622,612$596,703159,172$151,782Plant assets (net)1,006,188955,000266,880240,301Current liabilities126,681144,80767,51557,837Long-term liabilities217,721171,90056,57447,750Common stock, $10 par955,000955,000229,200229,200Retained earnings329,399279,99672,76357,296
(a)
Your answer is correct.
Prepare a vertical analysis of the 2017 income statement data for Pharoah Company and Cullumber Company.(Round all ratios to 1 decimal place, e.g. 2.5%.)
Condensed Income Statement
For the Year Ended December 31, 2017
Pharoah Company
Cullumber Company
Dollars
Percent
Dollars
Percent
Expenses
Net Income / (Loss)
Total Revenues
Net Sales
Dividends
Cost of Goods Sold
Operating Expenses
Income From Operations
Retained Earnings, January 1
Other Expenses and Losses
Retained Earnings, December 31
Total Operating Expenses
Sales Revenues
Total Expenses
Gross Profit
Income Before Income Taxes
Other Revenues and Gains
Interest Expense
Income Tax Expense
$1,924,000
%
$563,000
%
Total Expenses
Dividends
Net Sales
Interest Expense
Total Revenues
Gross Profit
Other Revenues and Gains
Retained Earnings, December 31
Operating Expenses
Total Operating Expenses
Net Income / (Loss)
Income Tax Expense
Expenses
Sales Revenues
Retained Earnings, January 1
Other Expenses and Losses
Income Before Income Taxes
Income From Operations
Cost of Goods Sold
1,067,000
%
281,000
%
Sales Revenues
Net Sales
Interest Expense
Expenses
Retained Earnings, January 1
Total Expenses
Income Tax Expense
Income From Operations
Income Before Income Taxes
Dividends
Net Income / (Loss)
Other Revenues and Gains
Total Operating Expenses
Retained Earnings, December 31
Total Revenues
Gross Profit
Other Expenses and Losses
Operating Expenses
Cost of Goods Sold
857,000
%
282,000
%
Cost of Goods Sold
Income From Operations
Other Expenses and Losses
Interest Expense
Retained Earnings, December 31
Income Tax Expense
Expenses
Retained Earnings, January 1
Dividends
Income Before Income Taxes
Net Income / (Loss)
Operating Expenses
Sales Revenues
Total Expenses
Total Revenues
Other Revenues and Gains
Net Sales
Gross Profit
Total Operating Expenses
254,000
%
91,000
%
Retained Earnings, January 1
Operating Expenses
Total Expenses
Sales Revenues
Total Revenues
Retained Earnings, December 31
Other Revenues and Gains
Net Sales
Expenses
Other Expenses and Losses
Gross Profit
Income From Operations
Income Tax Expense
Total Operating Expenses
Cost of Goods Sold
Interest Expense
Income Before Income Taxes
Dividends
Net Income / (Loss)
603,000
%
191,000
%
Income From Operations
Other Revenues and Gains
Dividends
Cost of Goods Sold
Expenses
Net Income / (Loss)
Retained Earnings, January 1
Income Before Income Taxes
Retained Earnings, December 31
Sales Revenues
Income Tax Expense
Total Operating Expenses
Net Sales
Gross Profit
Total Revenues
Total Expenses
Other Expenses and Losses
Interest Expense
Operating Expenses
Net Income / (Loss)
Gross Profit
Dividends
Retained Earnings, January 1
Expenses
Retained Earnings, December 31
Income Before Income Taxes
Total Expenses
Sales Revenues
Total Revenues
Net Sales
Operating Expenses
Total Operating Expenses
Income Tax Expense
Other Revenues and Gains
Other Expenses and Losses
Interest Expense
Income From Operations
Cost of Goods Sold
8,000
%
3,000
%
Gross Profit
Total Expenses
Other Revenues and Gains
Retained Earnings, December 31
Sales Revenues
Other Expenses and Losses
Income From Operations
Cost of Goods Sold
Net Sales
Operating Expenses
Interest Expense
Total Revenues
Net Income / (Loss)
Total Operating Expenses
Income Tax Expense
Expenses
Retained Earnings, January 1
Income Before Income Taxes
Dividends
595,000
%
188,000
%
Total Operating Expenses
Net Sales
Gross Profit
Income Before Income Taxes
Net Income / (Loss)
Interest Expense
Retained Earnings, December 31
Income From Operations
Total Revenues
Sales Revenues
Other Revenues and Gains
Total Expenses
Operating Expenses
Other Expenses and Losses
Cost of Goods Sold
Income Tax Expense
Dividends
Expenses
Retained Earnings, January 1
71,700
%
35,000
%
Income From Operations
Income Before Income Taxes
Total Operating Expenses
Expenses
Sales Revenues
Dividends
Total Expenses
Retained Earnings, January 1
Income Tax Expense
Other Expenses and Losses
Total Revenues
Interest Expense
Net Income / (Loss)
Retained Earnings, December 31
Cost of Goods Sold
Gross Profit
Other Revenues and Gains
Net Sales
Operating Expenses
$523,300
%
$153,000
%
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(b1)
Compute the 2017 return on assets and the return on common stockholders' equity for both companies.(Round all ratios to 1 decimal place, e.g. 2.5%.)
Pharoah Company
Cullumber Company
Return on assets
%
%
Return on common stockholders' equity
%
%
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Fundamentals of Cost Accounting
Authors: William Lanen, Shannon Anderson, Michael Maher
3rd Edition
9780078025525, 9780077517359, 77517350, 978-0077398194
