Question: Refer to the information for Kepler Company
Refer to the information for Kepler Company on the previous page.
Required:
Note: Round all percentages to one decimal place.
1. Express each item in the asset section of the balance sheet as a percentage of total assets for each year.
2. Express each item in the liabilities and equity section as a percentage of total liabilities and equity for each year.
3. Express each item in the income statement as a percentage of sales for each year.
Data for Problem 60:
Mike Sanders is considering the purchase of Kepler Company, a firm specializing in the manufacture of office supplies. To be able to assess the financial capabilities of the company, Mike has been given the company’s financial statements for the 2 most recent years.
Transcribed Image Text:
Kepler Company Comparative Balance Sheets This Year Last Year Assets Current assets: Cash $ 50,000 $ 100,000 Accounts receivable, net 300,000 150,000 Inventory Prepaid expenses 600,000 400,000 25,000 30,000 Total current assets $ 975,000 $ 680,000 Property and equipment, net 150,000 125,000 $1,100,000 Total assets $ 830,000 Liabilities and Stockholders' Equity Current liabilities: $ 400,000 $ 290,000 Accounts payable Short-term notes payable Total current liabilities 200,000 60,000 $ 600,000 $ 350,000 Long-term bonds payable, 12% 100,000 150,000 Total liabilities $ 700,000 $ 500,000 Stockholders' Equity: 200,000 Common stock (100,000 shares) Retained earnings Total liabilities and stockholders' equity 200,000 200,000 130,000 $1,100,000 $ 830,000 Kepler Company Comparative Income Statements This Year Last Year Sales $950,000 $900,000 Less: Cost of goods sold Gross margin Less: Selling and administrative expenses Operating income Less: Interest expense 490,000 500,000 $450,000 $410,000 275,000 260,000 $175,000 $150,000 12,000 $163,000 18,000 Income before taxes $132,000 65,200 $ 97,800 Less: Income taxes 52,800 Net income $ 79,200 Less: Dividends 27,800 19,200 Net income, retained $ 70,000 $ 60,000
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