1. Here are the comparative condensed income statements of Blue Spruce Corporation.
BLUE SPRUCE CORPORATION |
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---|---|---|---|---|
2022 |
2021 |
|||
Net sales |
$644,500 |
$557,200 |
||
Cost of goods sold |
457,595 |
401,184 |
||
Gross Profit |
186,905 |
156,016 |
||
Operating expenses |
77,340 |
47,362 |
||
Net income |
$ 109,565 |
$ 108,654 |
(a)
Prepare a horizontal analysis of the income statement data for Blue Spruce Corporation, using 2021 as a base. (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000), (20%). Round percentages to 1 decimal place, e.g. 12.1%.)
2. The following financial information is for Crane Company.
CRANE COMPANY |
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---|---|---|---|---|
Assets |
2022 |
2021 |
||
Cash |
$ 70,290 |
$ 69,840 |
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Debt investments (short-term) |
50,000 |
41,000 |
||
Accounts receivable |
107,000 |
92,000 |
||
Inventory |
234,000 |
162,000 |
||
Prepaid expenses |
29,000 |
23,000 |
||
Land |
135,000 |
135,000 |
||
Building and equipment (net) |
261,000 |
187,000 |
||
Total assets |
$886,290 |
$709,840 |
||
Liabilities and Stockholders’ Equity |
||||
Notes payable |
$173,774 |
$106,000 |
||
Accounts payable |
66,000 |
54,000 |
||
Accrued liabilities |
42,000 |
42,000 |
||
Bonds payable, due 2025 |
250,000 |
171,000 |
||
Common stock, $10 par |
203,000 |
203,000 |
||
Retained earnings |
151,516 |
133,840 |
||
Total liabilities and stockholders’ equity |
$886,290 |
$709,840 |
CRANE COMPANY |
||||
---|---|---|---|---|
2022 |
2021 |
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Sales revenue |
$905,450 |
$792,000 |
||
Cost of goods sold |
653,400 |
569,900 |
||
Gross profit |
252,050 |
222,100 |
||
Operating expenses |
197,723 |
160,324 |
||
Net income |
$ 54,327 |
$ 61,776 |
Additional information:
1. | Inventory at the beginning of 2021 was $116,000. | |
2. | Accounts receivable (net) at the beginning of 2021 were $88,000. | |
3. | Total assets at the beginning of 2021 were $642,000. | |
4. | No common stock transactions occurred during 2021 or 2022. | |
5. | All sales were on account. |
(a1)
Compute the liquidity and profitability ratios of Crane Company for 2021 and 2022. (Round current ratio, asset turnover and earnings per share to 2 decimal places, e.g 1.83 and all other answers to 1 decimal place, e.g. 1.8 or 1.8%. If % change is a decrease show the numbers as negative, e.g. -1.83% or (1.83%).)
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