Question

Here are comparative statement data for Duke Company and Lord Company, two competitors. All balance sheet data are as of December 31, 2020, and December 31, 2019.

		Duke Company				Lord Company
		2020		2019		2020		2019
Net sales		$1,878,000				$559,000
Cost of goods sold		1,100,508				296,829
Operating expenses		261,042				79,937
Interest expense		9,390				4,472
Income tax expense		54,462				6,149
Current assets		329,000		$312,100		83,200		$78,300
Plant assets (net)		519,900		501,200		139,800		124,200
Current liabilities		65,400		74,800		34,200		29,600
Long-term liabilities		108,800		90,400		30,200		26,000
Common stock, $10 par		499,500		499,500		120,500		120,500
Retained earnings		175,200		148,600		38,100		26,400

(a)

Prepare a vertical analysis of the 2020 income statement data for Duke Company and Lord Company. (Round percentages to 1 decimal place, e.g. 12.1%.)

Condensed Income Statement choose the accounting period                                                                      December 31, 2020For the Quarter Ended December 31, 2020For the Year Ended December 31, 2020
	Duke Company				Lord Company
	Dollars		Percent		Dollars		Percent
select an income statement item                                                                      Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsIncome Tax ExpenseInterest ExpenseNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesRevenuesTotal ExpensesTotal Revenues	$enter a dollar amount		enter a percentage number rounded to 1 decimal place %		$enter a dollar amount		enter a percentage number rounded to 1 decimal place %
select an income statement item                                                                      Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsIncome Tax ExpenseInterest ExpenseNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesRevenuesTotal ExpensesTotal Revenues	enter a dollar amount		enter a percentage number rounded to 1 decimal place %		enter a dollar amount		enter a percentage number rounded to 1 decimal place %
select a summarizing line for the first part                                                                      Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsIncome Tax ExpenseInterest ExpenseNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesRevenuesTotal ExpensesTotal Revenues	enter a total amount for the first part		enter total percentages rounded to 1 decimal place %		enter a total amount for the first part		enter total percentages rounded to 1 decimal place %
select an income statement item                                                                      Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsIncome Tax ExpenseInterest ExpenseNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesRevenuesTotal ExpensesTotal Revenues	enter a dollar amount		enter a percentage number rounded to 1 decimal place %		enter a dollar amount		enter a percentage number rounded to 1 decimal place %
select a summarizing line for the second part                                                                      Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsIncome Tax ExpenseInterest ExpenseNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesRevenuesTotal ExpensesTotal Revenues	enter a total amount for the second part		enter total percentages rounded to 1 decimal place %		enter a total amount for the second part		enter total percentages rounded to 1 decimal place %
select an opening name for the third part                                                                      Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsIncome Tax ExpenseInterest ExpenseNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesRevenuesTotal ExpensesTotal Revenues
select an income statement item                                                                      Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsIncome Tax ExpenseInterest ExpenseNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesRevenuesTotal ExpensesTotal Revenues	enter a dollar amount		enter a percentage number rounded to 1 decimal place %		enter a dollar amount		enter a percentage number rounded to 1 decimal place %
select a summarizing line for the third part                                                                      Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsIncome Tax ExpenseInterest ExpenseNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesRevenuesTotal ExpensesTotal Revenues	enter a total amount for all three parts		enter total percentages rounded to 1 decimal place %		enter a total amount for all three parts		enter total percentages rounded to 1 decimal place %
select an income statement item                                                                      Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsIncome Tax ExpenseInterest ExpenseNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesRevenuesTotal ExpensesTotal Revenues	enter a dollar amount		enter a percentage number rounded to 1 decimal place %		enter a dollar amount		enter a percentage number rounded to 1 decimal place %
select a closing name for this statement                                                                      Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsIncome Tax ExpenseInterest ExpenseNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesRevenuesTotal ExpensesTotal Revenues	$enter a total net income or loss amount		enter total percentages rounded to 1 decimal place %		$enter a total net income or loss amount		enter total percentages rounded to 1 decimal place %

Answer 1

Condensed Income Statement For the Year Ended December 31, 2020
	Duke   Company	Lord   Company
	Dollars (A)	% ( A/ $ 1,878,000 )	Dollars (B)	% ( B / $ 559,000 )
Net sales	$ 1,878,000	100%	$ 559,000	100%
Less: Cost of goods sold	($ 1,100,508 )	58.6%	($ 296,829 )	53.1%
Gross profit	$ 777,492	41.4%	$ 262,171	46.9%
Less: Operating expenses	($ 261,042)	13.9%	($ 79,937)	14.3%
Income from Operations	$ 516,450	27.5%	$ 182,234	32.6%
Other Expenses and Losses :
Interest expense	($ 9,390)	0.5%	($ 4,472)	0.8%
Income before Income taxes	$ 507,060	27%	$ 177,762	31.8%
Income Tax Expense	($ 54,462)	2.9%	($ 6,149)	1.1%
Net income / (Loss)	$ 452,598	24.1%	$ 171,613	30.7%