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× y WileyPLUS I https://edugen. wileyplus.com/edugen/student/mainfr.uni ractice Assignment Gradebook ORION Downloadable eTextbook gnment Problem 14-1A (Part Level Submission) Comparative statement data for Farris Company and Ratzlaff Company, two competitors, appea 2016 Farris Company Ratzlaff Company 2016 2017 2016 2017 $1,570,000 1,060,000 301,600 $339,700 240,500 79,500 2,500 6,600 Net sales Cost of goods sold Operating expenses Interest expense Income tax expense Current assets Plant assets (net) Current liabilities Long-term liabilities Common stock, $10 par Retained earnings 8,800 53,300 321,000 $312,400 83,200 $79,500 521,100 497,600 139,200 123,300 65,800 74,400 35,800 31,800 108,600 91,200 30,000 24,400 503,500 503,500 123,000 123,000 164,200 140,900 33,600 23,600 (a) Prepare a vertical analysis of the 2017 income statement data for Farris Company and Ratzla 12.1%.) Condensed Income Statement

Explanation / Answer

Prepare vertical income statement :

Farris company Ratzlaff company Dollar Percent Dollar Percent Net sales 1570000 100% 339700 100% Cost of goods sold 1060000 67.5% 240500 70.8% Gross profit 510000 32.5% 99200 29.2% Less: Operating expenses 301600 19.2% 79500 23.4% Income from operation 208400 13.3% 19700 5.8% Other expenses Less: Interest expenses 8800 0.6% 2500 0.7% Income before tax 199600 12.7% 17200 5.1% Less: Income tax 53300 3.4% 6600 2.0% Net income 146300 9.3% 10600 3.1%

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