Here are comparative statement data for Night Company and DayCompany, two compet

Question

Here are comparative statement data for Night Company and DayCompany, two

competitors. All balance sheet data are as of December 31, 2007,and December 31, 2006.

                                    NightCompany                    Day Company

                                  2007              2006              2007              2006

Net sales                    $350,000                               $1,200,000

Cost of goods sold       180,000                                 624,000

Operating expenses      51,000                                   278,000

Interest expense           3,000                                     10,000

Income tax expense      17,000                                   54,000

Current assets             130,000          $100,000         700,000          $650,000

Plant assets (net)          400,000          270,000          1,000,000       750,000

Current liabilities          60,000           52,000           250,000          275,000

Long-term liabilities       50,000           68,000           200,000          150,000

Common stock           360,000          210,000          950,000          700,000

Retained earnings         60,000           40,000           300,000          275,000

Instructions

(a) Prepare a vertical analysis of the 2007 income statementdata for Night Company and Day Company.

Explanation / Answer

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