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The following information was developed from the financial statements of Darwin, Inc. At the beginning of 2011, the companys former supplier went bankrupt, and the
The following information was developed from the financial statements of Darwin, Inc. At the beginning of 2011, the companys former supplier went bankrupt, and the company began buying merchandise from another supplier. PROBLEM 14.2A Analysis to Identify Favorable and Unfavorable Trends P A LO3 F U LO5 2011 2010 Gross profit on sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,008,000 $1,134,000 Income before income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230,400 252,000 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172,800 189,000 Net income as a percentage of net sales. . . . . . . . . . . . . . . . . . . . 6.0% 7.5% Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,880,000 Accumulated depreciation: equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370,000 Notes payable (due in 90 days)
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