Selected comparative financial statements of Bennington Company follow: BENNINGT

Question

Selected comparative financial statements of Bennington Company follow: BENNINGTON COMPANY Comparative Income Statements For Years Ended December 31, 2012, 2011, and 2010 2012 2011 2010 Sales $ 410,058 $ 314,138 $ 218,000 Cost of goods sold 246,855 199,163 139,520 Gross profit 163,203 114,975 78,480 Selling expenses 58,228 43,351 28,776 Administrative expenses 36,905 27,644 18,094 Total expenses 95,133 70,995 46,870 Income before taxes 68,070 43,980 31,610 Income taxes 12,661 9,016 6,417 Net income $ 55,409 $ 34,964 $ 25,193 BENNINGTON COMPANY Comparative Balance Sheets December 31, 2012, 2011, and 2010 2012 2011 2010 Assets Current assets $ 51,364 $ 40,186 $ 53,719 Long-term investments 0 1,000 3,820 Plant assets, net 93,936 99,906 59,356 Total assets $ 145,300 $ 141,092 $ 116,895 Liabilities and Equity Current liabilities $ 21,214 $ 21,023 $ 20,457 Common stock 70,000 70,000 52,000 Other paid-in capital 8,750 8,750 5,778 Retained earnings 45,336 41,319 38,660 Total liabilities and equity $ 145,300 $ 141,092 $ 116,895 2. Express the income statement data in common-size percents. BENNINGTON COMPANY Common-Size Comparative Income Statements For Years Ended December 31, 2012, 2011, and 2010 2012 2011 2010 Sales % % % Cost of goods sold Gross profit Selling expenses Administrative expenses Total expenses Income before taxes Income taxes Net income % % % 3. Express the balance sheet data in trend percents with 2010 as the base year. ( BENNINGTON COMPANY Balance Sheet Data in Trend Percents December 31, 2012, 2011, and 2010 2012 2011 2010 Assets Current assets % % % Long-term investments Plant assets Total assets Liabilities and Equity Current liabilities % % % Common stock Other contributed capital Retained earnings Total liabilities and equity

Explanation / Answer

Hi, Only Straight Line Method is mentioned in the question. So I am providing details for that only. Annual Depreciation for Each Year would be: = (48000-4000)/5 = 8800 Accumulated Depreciation Year 1 = 8800 Year 2 = 17600 Year 3 = 26400 Year 4 = 35200 Year 5 = 44000 Book Value Year 1 = 44000 - 8800 = 35200 Year 2 = 44000 - 17600 = 26400 Year 3 = 44000 - 26400 = 17600 Year 4 = 44000 - 35200 = 8800 Year 5 = 44000 - 44000 = 0 Thanks.

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