Question

Selected comparative financial statements of Korbin Company follow:

KORBIN COMPANY Comparative Income Statements For Years Ended December 31, 2017, 2016, and 2015

2017 2016 2015 Sales $ 392,189 $ 300,449 $ 208,500 Cost of goods sold 236,098 189,884 133,440 Gross profit 156,091 110,565 75,060 Selling expenses 55,691 41,462 27,522 Administrative expenses 35,297 26,440 17,306 Total expenses 90,988 67,902 44,828 Income before taxes 65,103 42,663 30,232 Income taxes 12,109 8,746 6,137 Net income $ 52,994 $ 33,917 $ 24,095 KORBIN COMPANY Comparative Balance Sheets December 31, 2017, 2016, and 2015 2017 2016 2015 Assets Current assets $ 53,162 $ 41,593 $ 55,599 Long-term investments 0 900 3,460 Plant assets, net 100,263 106,488 64,372 Total assets $ 153,425 $ 148,981 $ 123,431 Liabilities and Equity Current liabilities $ 22,400 $ 22,198 $ 21,600 Common stock 71,000 71,000 53,000 Other paid-in capital 8,875 8,875 5,889 Retained earnings 51,150 46,908 42,942 Total liabilities and equity $ 153,425 $ 148,981 $ 123,431

2. Complete the below table to calculate income statement data in common-size percents.

3. Complete the below table to calculate the balance sheet data in trend percents with 2015 as the base year.

Answer 1

2.

KORBIN COMPANY Comparative Income Statement For years ended Dec. 31, 2017, 2016, 2015

	2017		2016		2015
Sales	100.00	%	100.00	%	100.00	%
Cost of goods sold	60.20	%	63.20	%	64.00	%
Gross Profit	39.80	%	36.80	%	36.00	%
Selling expenses	14.20	%	13.80	%	13.20	%
Administrative expenses	9.00	%	8.80	%	8.30	%
Total expenses	23.20	%	22.60	%	21.50	%
Income before taxes	16.60	%	14.20	%	14.50	%
Income taxes	3.09	%	2.91	%	2.94	%
Net Income	13.51	%	11.29	%	11.56	%

3.

KORBIN COMPANY Balance Sheet Data in Trend Percents December 31, 2017, 2016, 2015

	2017		2016		2015
Assets
Current Assets	95.62	%	74.81	%	100.00	%
Long-term investments	0	%	26.01	%	100.00	%
Plant assets, net	155.75	%	165.42	%	100.00	%
Total assets	124.30	%	120.70	%	100.00	%
Liabilities and equity
Current liabilities	103.70	%	102.77	%	100.00	%
Common stock	133.96	%	133.96	%	100.00	%
Other paid-in capital	150.70	%	150.70	%	100.00	%
Retained Earnings	119.11	%	109.23	%	100.00	%
Total liabilities and equity	124.30	%	120.70	%	100.00	%

Calculation : Income statement :

Cost of Goods Sold = (Cost of goods sold/Sales)*100

For 2017, Cost of goods sold = ($236,098/$392,189)*100 = 60.20%

For 2016, Cost of goods sold = ($189,884/300,449)*100 = 63.20%

Balance sheet: Base year = 2015

Current assets for 2017 = ($53,162/$55,599)*100 = 95.62%

For 2016, Current Assets = ($41,593/$55,599)*100 = 74.81%