Question

Required information

Problem 17-2A Ratios, common-size statements, and trend percents LO P1, P2, P3

[The following information applies to the questions displayed below.]

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	$	449,371		$	344,255		$	238,900
Cost of goods sold		270,521			217,225			152,896
Gross profit		178,850			127,030			86,004
Selling expenses		63,811			47,507			31,535
Administrative expenses		40,443			30,294			19,829
Total expenses		104,254			77,801			51,364
Income before taxes		74,596			49,229			34,640
Income taxes		13,875			10,092			7,032
Net income	$	60,721		$	39,137		$	27,608

KORBIN COMPANY
Comparative Balance Sheets
December 31, 2017, 2016, and 2015
	2017			2016			2015
Assets
Current assets	$	45,817		$	35,846		$	47,918
Long-term investments		0			1,100			3,610
Plant assets, net		86,412			91,453			54,851
Total assets	$	132,229		$	128,399		$	106,379
Liabilities and Equity
Current liabilities	$	19,305		$	19,131		$	18,616
Common stock		66,000			66,000			48,000
Other paid-in capital		8,250			8,250			5,333
Retained earnings		38,674			35,018			34,430
Total liabilities and equity	$	132,229		$	128,399		$	106,379

Problem 17-2A Part 2

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, 2017, 2016, and 2015 2017 2016 2015 Sales 3.39 % % % 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 taxes -1 -1 -1 Net income % % % Required information Problem 17-2A Ratios, common-size statements, and trend percents LO P1, P2, P3 [The following information applies to the questions displayed below.] 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 $ 449,371 $ 344,255 $ 238,900 Cost of goods sold 270,521 217,225 152,896 Gross profit 178,850 127,030 86,004 Selling expenses 63,811 47,507 31,535 Administrative expenses 40,443 30,294 19,829 Total expenses 104,254 77,801 51,364 Income before taxes 74,596 49,229 34,640 Income taxes 13,875 10,092 7,032 Net income $ 60,721 $ 39,137 $ 27,608 KORBIN COMPANY Comparative Balance Sheets December 31, 2017, 2016, and 2015 2017 2016 2015 Assets Current assets $ 45,817 $ 35,846 $ 47,918 Long-term investments 0 1,100 3,610 Plant assets, net 86,412 91,453 54,851 Total assets $ 132,229 $ 128,399 $ 106,379 Liabilities and Equity Current liabilities $ 19,305 $ 19,131 $ 18,616 Common stock 66,000 66,000 48,000 Other paid-in capital 8,250 8,250 5,333 Retained earnings 38,674 35,018 34,430 Total liabilities and equity $ 132,229 $ 128,399 $ 106,379 Problem 17-2A Part 3 3. Complete the below table to calculate the balance sheet data in trend percents with 2015 as the base year. (Round your percentage answers to 2 decimal places.) KORBIN COMPANY Balance Sheet Data in Trend Percents December 31, 2017, 2016 and 2015 2017 2016 2015 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

• All working forms part of the answer
• Amounts are in $
• Income statement data in common size percentage is calculated by dividing respective figure by the amount of net sales.

Requirement 2

KORBIN COMPANY
Comparative Income Statements
For Years Ended December 31 2017 2016 and 2015
	2017		2016		2015
	Amount	% of sales	Amount	% of sales	Amount	% of sales
Sales	$ 449371.00	100.00%	$344255.00	100.00%	$238900.00	100.00%
Cost of goods sold	$ 270521.00	60.20%	$217225.00	63.10%	$152896.00	64.00%
Gross profit	$ 178850.00	39.80%	$127030.00	36.90%	$ 86004.00	36.00%
Selling expenses	$    63811.00	14.20%	$ 47507.00	13.80%	$ 31535.00	13.20%
Administrative expenses	$    40443.00	9.00%	$ 30294.00	8.80%	$ 19829.00	8.30%
Total expenses	$ 104254.00	23.20%	$ 77801.00	22.60%	$ 51364.00	21.50%
Income before taxes	$    74596.00	16.60%	$ 49229.00	14.30%	$ 34640.00	14.50%
Income taxes	$    13875.00	3.09%	$ 10092.00	2.93%	$    7032.00	2.94%
Net income	$    60721.00	13.51%	$ 39137.00	11.37%	$ 27608.00	11.56%

• Requirement 3

KORBIN COMPANY
Comparative Balance Sheets
December 31, 2017, 2016, and 2015
	2017			2016			2015
Assets	Amount	Change as per 2015 data	% change	Amount	Change as per 2015 data	% change	Base data	Base %
Current assets	$   45,817.00	$   (2,101.00)	-4.38%	$   35,846.00	$     (12,072.00)	-25.19%	$   47,918.00	100.00%
Long-term investments	$              -	$   (3,610.00)	-100.00%	$     1,100.00	$       1,100.00	2.30%	$     3,610.00	100.00%
Plant assets, net	$   86,412.00	$ 31,561.00	57.54%	$   91,453.00	$      91,453.00	190.85%	$   54,851.00	100.00%
Total assets	$1,32,229.00	$ 25,850.00	24.30%	$1,28,399.00	$   1,28,399.00	267.96%	$1,06,379.00	100.00%
Liabilities and Equity
Current liabilities	$   19,305.00	$       689.00	3.70%	$   19,131.00	$      19,131.00	39.92%	$   18,616.00	100.00%
Common stock	$   66,000.00	$ 18,000.00	37.50%	$   66,000.00	$      66,000.00	137.74%	$   48,000.00	100.00%
Other paid-in capital	$     8,250.00	$   2,917.00	54.70%	$     8,250.00	$       8,250.00	17.22%	$     5,333.00	100.00%
Retained earnings	$   38,674.00	$    4,244.00	12.33%	$   35,018.00	$      35,018.00	73.08%	$   34,430.00	100.00%
Total liabilities and equity	$1,32,229.00	$ 25,850.00	24.30%	$1,28,399.00	$   1,28,399.00	267.96%	$1,06,379.00	100.00%