Vertical Analysis of Comparative Financial Statements

A comparative income statement and balance sheet of Miller Electronics Corporation for the last two years are shown.

Required:

Prepare a vertical analysis of the income statement and balance sheet. Show each item on the income statement as a percentage of the net sales for each year. On the balance sheet, show each asset item as a percentage of the total assets and each liability and equity item as a percentage of the total liabilities and stockholders' equity. Round percentages to one decimal place.

Miller Electronics Corporation Comparative Income Statement For Years Ended December 31, 20-2 and 20-1

Miller Electronics Corporation Comparative Income Statement For Years Ended December 31, 20-2 and 20-1 20-2 20-1 $414,710 $654,010 389,340 254,340 $160,370 Net Sales (all on account) Cost of goods sold Gross profit Administrative expenses Selling expenses Total operating expenses Operating income Interest expense income before income taxes Income tax expense $264,670 $63,083 66,664 $129,747 $42,406 43,827 $86,233 $74,137 $134,923 1,293 1,211 $133,630 31,124 $72,926 12,658 Net income $102,506 $60,268 Miller Electronics Corporation Comparative Balance Sheet December 31, 20-2 and 20-1 20-2 20-1 Assets Current assets: Cash $43,114 73,439 91,021 3,753 $211,327 $22,838 47,210 49,586 1,129 $120,763 $12,322 S8,760 104,003 $116,325 $327,652 70,000 $78,760 $199,523 Receivables (net) Merchandise inventory Supplies and prepayments Total current assets Property, plant, and equipment: Office equipment (net) Factory equipment (net) Total property, plant, and equipment Total assets Liabilities Current liabilities Notes payable Accounts payable Accrued and withheld payroll taxes Total current liabilities Stockholders' Equity Common stock ($10 par) Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $10,200 $5,800 43,428 6,136 $59,764 30,061 5,276 $41,137 $84,000 $100,000 167,888 74,386 $267.888 $327,652 $158,386 $199,523 20-2 20-2 20-1 20-1 Amount Percent Amount Percent $654,010 $414,710 Net sales (all on account) Cost of goods sold 389,340 254,340 Gross profit $264,670 $160,370 Administrative expenses $42,406 $63,083 66,664 Selling expenses 43,827 Total operating expenses $129,747 $86,233 Operating income $134,923 $74,137 Interest expense 1,293 1,211 Income before income taxes $133,630 $72,926 12,658 Income tax expense 31,124 Net income $102,506 $60,268 Miller Electronics Corporation Comparative Balance Sheet December 31, 20-2 and 20-1 Assets 20-2 20-2 20-1 20-1 Amount Percent Amount Percent Current assets: Cash $43,114 $22,838 47,210 Receivables (net) 73,439 Merchandise inventory 91,021 49,586 Supplies and prepayments 3,753 1,129 $211,327 $120.763 Total current assets Property, plant, and equipment: Orlice equipment (net) $12,322 $8,760 Factory equipment (net) 104,003 70,000 Total prop., plant, and equip $116,325 $78,760 Total assets $327,652 $199,523 Liabilities Current liabilities: $10,200.0 $5,800 Notes payable Accounts payable 30,061 43,428 6,136 Accrued and withheld payroll taxes 5,276 Total current liabilities $59,764 $41,137 Stockholders' Equity $100,000 Common stock ($10 par) $84,000 Retained earnings 167,888 74,386 Total stockholders' equity $267.888 $ 158,386 Total liab, and stockholders' equity $327,652 $199,523