roblem 18-7A 2014, are shown below ave Products Ltd.'s financial statements for the year ended year ended December 31, Preparing a horizontala NATURAL MICROWAVE PRODUCTS LTD vertical analysis of a fin ncome Statement For the Year Ended December 31, 2014 standard financial ration decision making, using decision making Net sales Cost of goods sold Gross margin Operating expenses: 594500 3 a. 8.64 610,000 335,000 Selling expenses Administrative expenses Interest expense Total operating expenses 128,200 78,000 Operating income Income taxes (25%) Net income 228,200 26,700 NATURAL MICROWAVE PRODUCTS LTD Statement of Retained Earnings For the Year Ended December 31, 2014 Retained earnings, January 1, 2014 5162,000 80,100 242,100 Add net income for 2014 Less dividends: Preferred Retained earnings, December 31, 2014 Common 9,000 34,000 NATURAL MICROWAVE PRODUCTS LTD Balance Sheet December 31, 2014 and 2013 2014 Assets Cash Accounts receivable Merchandise inventory Prepaid expenses 45,000 $ 92,000 84,000 102,000 8,000 118,000 6,000 474,000 498,000 (70,000) Property, plant, and equipment (106,000) 40,00040,000 $718,000,000 Less accumulated amortization Goodwill Total assets Liabilities Accounts payable Notes payable (due in 30 days) Mortgage payable $ 30,100 3,000 68,800 $ 43,000 10,000 130,000 183,000 Total liabilities (Continued)