Vertical Analysis of Comparative Financial Statements A comparative income statement and balance sheet of Miller Electronics Corporation for the last two years are shown. Miller Electronics Corporation Comparative Income Statement For Years Ended December 31, 20-2 and 20-1 20-2 Net Sales (all on account) $650,220 Cost of goods sold 395,410 Gross profit $254,810 Administrative expenses $63,518 Selling expenses 65,992 20-1 $420,600 258,668 $161,932 $42,288 43,936 $129,510 Total operating expenses Operating income Interest expense $125,300 1,282 $86,224 $75,708 1,204 Income before income taxes Income tax expense $124,018 31,005 $93,013 $74,504 13,630 $60,874 Net income Miller Electronics Corporation Comparative Balance Sheet December 31, 20-2 and 20-1 20-2 20-1 Assets Current assets: Cash $22,006 $42,900 73,642 Receivables (net) Merchandise inventory 92,060 47,510 50,396 1,158 $121,070 Supplies and prepayments 3,788 $212,390 $8,490 Total current assets Property, plant, and equipment: Office equipment (net) Factory equipment (net) Total property, plant, and equipment Total assets 71,190 $12,150 105,360 $117,510 $329,900 $79,680 $200,750 Liabilities Current liabilities Notes payable Accounts payable Accrued and withheld payroll taxes $10,000 43,524 6,250 $6,000 30,242 5,400 Total current liabilities $59,774 $41,642 Stockholders' Equity Common stock ($10 par) Retained earnings Total stockholders' equity $100,000 170,126 $270,126 $329,900 $84,000 75,108 $159,108 $200,750 Total liabilities and stockholders' equity 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. Comparative Income Statement For Years Ended December 31, 20-2 and 20-1 20-2 20-2 20- 1 2 0-1 Amount Percent Amount Percent $650,220 $420,600 Net sales (all on account) Cost of goods sold 395,410 258,668 Gross profit $254,810 $161,932 Administrative expenses $63,518 65,992 $42,288 43,936 Selling expenses Total operating expenses $129,510 $86,224 Operating income $125,300 1,282 $75,708 1,204 Interest expense $74,504 Income before income taxes $124,018 Income tax expense 31,005 13,630 Net income $93,013 $60,874 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 $22,006 $42,900 73,642 Receivables (net) 47,510 Merchandise inventory 92,060 50,396 Supplies and prepayments 3,788 1,158 $212,390 $121,070 Total current assets Property, plant, and equipment: Office equipment (net) $12,150 $8,490 Factory equipment (net) 105,360 71,190 Total prop., plant, and equip. $117,510 $79,680 Total assets $329,900 $200,750 Liabilities Current liabilities: Notes payable $10,000 43,524 6,250 $6,000 30,242 Accounts payable Accrued and withheld payroll taxes 5,400 Total current liabilities $59,774 $ 41,642 Common stock ($10 par) Stockholders' Equity. $100,000 $84,000 75,108 Retained earnings 170,126 Total stockholders' equity $270,126 $159,108 Total liab. and stockholders' equity $329,900 $200,750
