Question

1. Here are the comparative condensed income statements of Blue Spruce Corporation. BLUE SPRUCE CORPORATION Condensed...

1. Here are the comparative condensed income statements of Blue Spruce Corporation.

BLUE SPRUCE CORPORATION
Condensed Income Statements
For the Years Ended December 31

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
Balance Sheets
December 31

Assets

2022

2021

Cash

$ 70,290

$ 69,840

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
Income Statements
For the Years Ended December 31

2022

2021

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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