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)

Prepare 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

%