Question

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Selected comparative financial statements of Korbin Company follow:

KORBIN COMPANY
Comparative Income Statements
For Years Ended December 31, 2018, 2017, and 2016
	2018			2017			2016
Sales	$	444,857		$	340,797		$	236,500
Cost of goods sold		267,804			215,043			151,360
Gross profit		177,053			125,754			85,140
Selling expenses		63,170			47,030			31,218
Administrative expenses		40,037			29,990			19,630
Total expenses		103,207			77,020			50,848
Income before taxes		73,846			48,734			34,292
Income tax expense		13,735			9,990			6,961
Net income	$	60,111		$	38,744		$	27,331

KORBIN COMPANY
Comparative Balance Sheets
December 31, 2018, 2017, and 2016
	2018			2017			2016
Assets
Current assets	$	46,886		$	36,682		$	49,036
Long-term investments		0			900			3,460
Plant assets, net		89,807			95,152			57,474
Total assets	$	136,693		$	132,734		$	109,970
Liabilities and Equity
Current liabilities	$	19,957		$	19,777		$	19,245
Common stock		64,000			64,000			46,000
Other paid-in capital		8,000			8,000			5,111
Retained earnings		44,736			40,957			39,614
Total liabilities and equity	$	136,693		$	132,734		$	109,970

Required:

1. Complete the below table to calculate each year's current ratio.

	Current Ratio Choose Numerator: / Choose Denominator: = Current ratio / = Current ratio 2018: / = 0 to 1 2017: / = 0 to 1 2016: / = 0 to 1

2. Complete the below table to calculate income statement data in common-size percents. (Round your percentage answers to 2 decimal places.)

	KORBIN COMPANY Common-Size Comparative Income Statements For Years Ended December 31, 2018, 2017, and 2016 2018 2017 2016 Sales    % % % Cost of goods sold -1 -1 -1 Gross profit Selling expenses -1 -1 -1 Administrative expenses -1 -1 -1 Total expenses Income before taxes -1 -1 -1 Income tax expense -1 -1 -1 Net income % % %

3. Complete the below table to calculate the balance sheet data in trend percents with 2016 as the base year. (Round your percentage answers to 2 decimal places.)

	KORBIN COMPANY Balance Sheet Data in Trend Percents December 31, 2018, 2017 and 2016 2018 2017 2016 Assets Current assets % % 100.00 % Long-term investments 100.00 Plant assets, net 100.00 Total assets % % 100.00 % Liabilities and Equity Current liabilities % % 100.00 % Common stock 100.00 Other paid-in capital 100.00 Retained earnings 100.00 Total liabilities and equity % % 100.00 %

Answer 1

Current Ratio = Current Asset / Current Liability

Percentage in Comon size income statement = Individuval item / Net Sales x 100%

Increase (Decrease) in Trend analysis balance sheet = amount in Current Year - Amount in base year

% changes = (Increase or Decrease) / Amount in base year x 100%

	Numerator		Denominator	Answer
2018	46,886	/	19,957	2.35	:1
2017	36,682	/	19,777	1.85	:1
2016	49,036	/	19,245	2.55	:1

Common size analysis of Income statement were as follows:

KORBIN COMPANY
COMPARATIVE INCOME STATEMENT
	2018	%	2017	%	2016	%
Sales	444,857	100.00%	340,797	100.00%	236,500	100.00%
Cost of Goods Sold	267,804	60.20%	215,043	63.10%	151,360	64.00%
Gross Profit	177,053	39.80%	125,754	36.90%	85,140	36.00%
Selling Expense	63,170	14.20%	47,030	13.80%	31,218	13.20%
Administrative Expense	40,037	9.00%	29,990	8.80%	19,630	8.30%
Total Expense	103,207	23.20%	77,020	22.60%	50,848	21.50%
Income Before Tax	73,846	16.60%	48,734	14.30%	34,292	14.50%
Income Tax Expense	13,735	3.09%	9,990	2.93%	6,961	2.94%
Net Income	60,111	13.51%	38,744	11.37%	27,331	11.56%

Trend analysis of balance sheet as follows:

KORBIN COMPANY
Balance sheet in Trend Percentage
	2018	Increase (Decrease)	% Changes	2017	Increase (Decrease)	% Changes	2016
Assets
Current Assets	46,886	(2,150)	-4.38%	36,682	(12,354)	-25.19%	49,036
Long Term Investment	-	(3,460)	-100.00%	900	(2,560)	-73.99%	3,460
Plant Asset Net	89,807	32,333	56.26%	95,152	37,678	65.56%	57,474
Total Assets	136,693	26,723	24.30%	132,734	22,764	20.70%	109,970
Liability and Equity
Current Liability	19,957	712	3.70%	19,777	532	2.76%	19,245
Common Stock	64,000	18,000	39.13%	64,000	18,000	39.13%	46,000
Other Paid in Capital	8,000	2,889	56.53%	8,000	2,889	56.53%	5,111
Retained Earnings	44,736	5,122	12.93%	40,957	1,343	3.39%	39,614
Total Liability and Equity	136,693	26,723	24.30%	132,734	22,764	20.70%	109,970