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BU 330 Assignment-8 Sanborn Corporation

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Question;Horizontal 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;Sanborn Corporation;Comparative Balance Sheets;December 31, 20x8 and 20x7;20x8 20x7 Increase or Decrease;Amount Percentage;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;2. Using the forms below, prepare common-size income statements and balance sheets for 20x7 and 20x8 (40 points);Sanborn Corporation;Common-Size Income Statements;For the Years Ended December 31, 20x8 and 20x7;20x8 20x7;Net sales;Cost of goods sold;Gross margin;Operating expenses;Selling expenses;Administrative expenses;Total operating expenses;Income from operations;Interest expense;Income before income taxes;Income taxes expense;Net income;Sanborn Corporation;Common-Size Balance Sheets;December 31, 20x8 and 20x7;20x8 20x7;Assets;Cash;Accounts receivable (net);Inventory;Property, plant, and equipment (net);Total assets;Liabilities and Stockholders' Equity;Accounts payable;Notes payable (short-term);Bonds payable;Common stock, $10 par value;Retained earnings;Total liabilities and stockholders' equity;3. Comment on the results in requirements 1 and 2 by indentifying;favorable and unfavorable changes in the components and composition of;the statements. (30 points)

 

Paper#40074 | Written in 18-Jul-2015

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