Answer:
Korbin Company
Selected Comparative Financial Statements:
1. KORBIN COMPANY Comparative Income Statements
For Years Ended December 31, 2017, 2016, and 2015
2017 % 2016 % 2015 %
Sales $515,770 100% $395,122 100% $274,200 100%
Cost of goods sold 310,494 60% 250,507 63% 175,488 64%
Gross profit 205,276 40% 144,615 37% 98,712 36%
Selling expenses 73,239 14% 54,527 14% 36,194 13%
Admin. expenses 46,419 9% 34,771 9% 22,759 8%
Total expenses 119,658 23% 89,298 23% 58,953 21%
Income before taxes 85,618 17% 55,317 14% 39,759 15%
Income taxes 15,925 3% 11,340 3% 8,071 3%
Net income $69,693 14% $43,977 11% $31,688 12%
2. KORBIN COMPANY
Balance Sheet Data in Trend Percents
for December 31, 2017, 2016, and 2015
2017 2016 2015
Assets
Current assets 100.00 % 78% 105%
Long-term investments 100.00 500% 3,690%
Plant assets, net 100.00 107% 64%
Total assets _124__% _121_ % 100.00 %
Liabilities and Equity
Current liabilities _104_ % _103__ % 100.00 %
Common Stock 100.00 100% 75%
Other paid-in capital 100.00 100% 66%
Retained earnings 100.00 92% 84%
Total liabilities and equity _124_ % _121_ % 100.00
Explanation:
a. Data:
KORBIN COMPANY
Comparative Balance Sheets
December 31, 2017, 2016, and 2015
2017 2016 2015
Assets
Current assets $53,867 $42,145 $56,338
Long-term investments 0 500 3,690
Plant assets, net 100,040 106,805 63,791
Total assets $153,907 $149,450 $123,819
Liabilities and Equity
Current liabilities $22,470 $22,268 $21,668
Common stock 71,000 71,000 53,000
Other paid-in capital 8,875 8,875 5,889
Retained earnings 51,562 47,307 43,262
Total liabilities & equity $153,907 $149,450 $123,819
b) In an income statement vertical analysis, each line item is calculated as a percentage of the sales, which is itself 100%. This enables the proportional analysis of all the items to be computed about their financial performance in relation to the sales for the period. It can help management to dictate unusual items, errors, and other outliers.
c) The balance sheet trend analysis shows whether the entity's financial position is improving or not in relation to the base period. Each item is compared horizontally across periods. The calculation of trend uses the amount in the non-base year and divides it by the amount of the base year x 100.
