BU330 Accounting for Managers - Assignment 8 - Ashworth College
aks198Horizontal and Vertical Analysis
Sanborn Corporation’s condensed comparative income statements for 20x8 and 20x7 appear below. The corporation’s condensed comparative balance sheets for 20x8 and 20x7 appear on the next page.
Sanborn Corporation | |||
Comparative Income Statements | |||
For the Years Ended December 31, 20x8 and 20x7 | |||
(in thousands of dollars) | |||
| 20x8 | 20x7 | |
Net sales | $3,276,800 | $3,146,400 | |
Cost of goods sold | 2,088,800 | 2,008,400 | |
Gross margin | $1,188,000 | $1,138,000 | |
Operating expenses |
|
| |
| Selling expenses | $ 476,800 | $ 518,000 |
| Administrative expenses | 447,200 | 423,200 |
| Total operating expenses | $ 924,000 | $ 941,200 |
Income from operations | $ 264,000 | $ 196,800 | |
Interest expense | 65,600 | 39,200 | |
Income before income taxes | $ 198,400 | $ 157,600 | |
Income taxes expense | 62,400 | 56,800 | |
Net income | $ 136,000 | $ 100,800 | |
Earnings per share | $3.40 | $2.52 |
Sanborn Corporation | ||
Comparative Balance Sheets | ||
December 31, 20x8 and 20x7 | ||
| 20x8 | 20x7 |
Assets | ||
Cash | $ 81,200 | $ 40,800 |
Accounts receivable (net) | 235,600 | 229,200 |
Inventory | 574,800 | 594,800 |
Property, plant, and |
|
|
equipment (net) | 750,000 | 720,000 |
Total assets | $1,641,600 | $1,584,800 |
| ||
Liabilities and Stockholders' Equity | ||
Accounts payable | $ 267,600 | $ 477,200 |
Notes payable (short-term) | 200,000 | 400,000 |
Bonds payable | 400,000 | — |
Common stock, $10 par value | 400,000 | 400,000 |
Retained earnings | 374,000 | 307,600 |
Total liabilities and |
|
|
stockholders' equity | $1,641,600 | $1,584,800 |
1. Prepare schedules showing the amount and percentage changes from 20x7 to 20x8 for the comparative income statements and the balance sheets. You may use the forms below. (40 points)
Sanborn Corporation | |||||
Comparative Income Statements | |||||
For the Years Ended December 31, 20x8 and 20x7 | |||||
(in thousands of dollars) | |||||
| 20x8 | 20x7 | Increase or Decrease | ||
Amount | Percentage | ||||
Net sales | $3,276,800 | $3,146,400 |
|
| |
Cost of goods sold | 2,088,800 | 2,008,400 |
|
| |
Gross margin | $1,188,000 | $1,138,000 |
|
| |
Operating expenses |
|
|
|
| |
| Selling expenses | $ 476,800 | $ 518,000 |
|
|
| Administrative expenses | 447,200 | 423,200 |
|
|
| Total operating expenses | $ 924,000 | $ 941,200 |
|
|
Income from operations | $ 264,000 | $ 196,800 |
|
| |
Interest expense | 65,600 | 39,200 |
|
| |
Income before income taxes | $ 198,400 | $ 157,600 |
|
| |
Income taxes expense | 62,400 | 56,800 |
|
| |
Net income | $ 136,000 | $ 100,800 |
|
| |
Earnings per share | $3.40 | $2.52 |
|
|
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