Problem 17-2A Ratios, common-size statements, and trend percents LO P1, P2, P3 (The following information applies to the questions displayed below.) Selected comparative financial statements of Korbin Company follow. KORBIN COMPANY Comparative Income Statements For Years Ended December 31, 2019, 2018, and 2017 2019 2018 2017 Sales $ 469,498 $ 359,674 $ 249,600 Cost of goods sold 282,638 228,33 159, 744 Gross profit 186,860 131,641 89,856 Selling expenses 66,669 49,635 32,947 Administrative expenses 31,651 20, 717 Total expenses 108,924 81,286 53,664 Income before taxes 77,936 50, 355 36,192 Income tax expense 14,496 10,323 7,347 Net income $ 63,440 $ 40,032 $ 28,845 42,255 2018 2017 KORBIN COMPANY Comparative Balance Sheets December 31, 2019, 2018, and 2017 2019 Assets Current assets $ 55,100 Long-term investments Plant assets, net 100,771 Total assets $ 155,871 Liabilities and Equity Current liabilities $ 22,757 Common stock 72,eee Other paid-in capital 9,00 Retained earnings 52,114 Total liabilities and equity $ 155,871 $ 36,879 600 92, e92 $ 129,481 $ 49,298 3,460 54,517 $ 107,275 $ 19, 293 72,eee 9,000 29,188 $ 129,481 $ 18,773 54,000 6,eee 28,502 $ 107,275 Problem 17-2A Part 1 Required: 1. Complete the below table to calculate each year's current ratio. Current Ratio Choose Denominator: Choose Numerator: 1 = Current ratio Current ratio 0 to 1 2019 = 2018 Accounts receivable 0 to 1 2017 Cost of goods sold = 0 to 1 Current assets Current liabilities Net sales Problem 17-2A Part 1 Required: 1. Complete the below table to calculate each year's current ratio. Current Ratio Choose Numerator: Choose Denominator: Current ratio / II Current ratio 2019 / n to 1 Current assets 2018 / to 1 Current liabilities 2017 / to 1 Net sales Accounts receivable, net Cost of goods sold Average accounts receivable, net Problem 17-2A Part 2 2. Complete the below table to calculate income statement data in common-size percents. (Round your percentage answers to 2 decimal places.) KORBIN COMPANY Common-Size Comparative Income Statements For Years Ended December 31, 2019, 2018, and 2017 2019 2018 2017 Sales : % % % Cost of goods sold Gross profit Selling expenses Administrative expenses Total expenses Income before taxes Income tax expense Net income % % % Problem 17-2A Part 3 3. Complete the below table to calculate the balance sheet data in trend percents with 2017 as base year. (Round your percentage answers to 2 decimal places.) KORBIN COMPANY Balance Sheet Data in Trend Percents December 31, 2019, 2018 and 2017 2019 2018 2017 Assets Current assets % % 100.00 % Long-term investments 100.00 Plant assets, net 100.00 Total assets % % 100.00 % Liabilities and Equity Current liabilities % % 100.00 % Common stock 100.00 Other paid-in capital 100.00 Retained earnings 100.00 Total liabilities and equity % % 100.00 % Problem 17-2A Part 4 4. Refer to the results from parts 1, 2, and 3. (a) Did cost of goods sold make up a greater portion of sales for the most recent year? O Yes O No (b) Did income as a percent of sales improve in the most recent year? Yes O No (c) Did plant assets grow over this period? O Yes O No
