BU330 Accounting for Managers assignment 8

$26.00

Description

BU330 Accounting for Managers assignment 8

Directions: Be sure to make an
electronic copy of your answer before submitting it to Ashworth College
for grading. Unless otherwise stated, answer in complete sentences, and
be sure to use correct English spelling and grammar. Sources must be
cited in APA format. Your response should be a minimum of one (1)
single-spaced page to a maximum of two (2) pages in length; refer to
the “Assignment Format” page for specific format requirements.

Horizontal and Vertical Analysis

Sanborn Corporation’s condensed comparative
income statements for 20×8 and 20×7 appear below. The corporation’s condensed comparative
balance sheets for 20×8 and 20×7 appear on the next page.

Sanborn Corporation

Comparative Income Statements

For the Years Ended December 31, 20×8 and 20×7

(in thousands of dollars)

20×8

20×7

Net sales

$3,276,800

$3,146,400

Cost of goods sold

2,088,800

2,008,400

Gross margin

$1,188,000

$1,138,000

Operating expenses

Selling expenses

$ 476,800

$ 518,000

Administrative expenses

447,200

423,200

Total operating expenses

$ 924,000

$ 941,200

Income from operations

$ 264,000

$ 196,800

Interest expense

65,600

39,200

Income before income taxes

$ 198,400

$ 157,600

Income taxes expense

62,400

56,800

Net income

$ 136,000

$ 100,800

Earnings per share

$3.40

$2.52

Sanborn Corporation

Comparative Balance Sheets

December 31, 20×8 and 20×7

20×8

20×7

Assets

Cash

$
81,200

$
40,800

Accounts receivable (net)

235,600

229,200

Inventory

574,800

594,800

Property, plant, and

equipment (net)

750,000

720,000

Total assets

$1,641,600

$1,584,800

Liabilities
and Stockholders’ Equity

Accounts payable

$
267,600

$
477,200

Notes payable (short-term)

200,000

400,000

Bonds payable

400,000

—

Common stock, $10 par value

400,000

400,000

Retained earnings

374,000

307,600

Total liabilities and

stockholders’ equity

$1,641,600

$1,584,800

1. Prepare
schedules showing the amount and percentage changes from 20×7 to 20×8 for the
comparative income statements and the balance sheets. You may use the forms below. (40 points)

Sanborn Corporation

Comparative Income Statements

For the Years Ended December 31, 20×8 and 20×7

(in thousands of dollars)

20×8

20×7

Increase or Decrease

Amount

Percentage

Net sales

$3,276,800

$3,146,400

Cost of goods sold

2,088,800

2,008,400

Gross margin

$1,188,000

$1,138,000

Operating expenses

Selling expenses

$
476,800

$
518,000

Administrative expenses

447,200

423,200

Total operating expenses

$ 924,000

$ 941,200

Income from operations

$
264,000

$
196,800

Interest expense

65,600

39,200

Income before income taxes

$
198,400

$
157,600

Income taxes expense

62,400

56,800

Net income

$
136,000

$
100,800

Earnings per share

$3.40

$2.52

Sanborn Corporation

Comparative Balance Sheets

December 31, 20×8 and 20×7

20×8

20×7

Increase or Decrease

Amount

Percentage

Assets

Cash

$
81,200

$
40,800

Accounts receivable (net)

235,600

229,200

Inventory

574,800

594,800

Property, plant, and

equipment (net)

750,000

720,000

Total assets

$1,641,600

$1,584,800

Liabilities
and Stockholders’ Equity

Accounts payable

$
267,600

$
477,200

Notes payable (short-term)

200,000

400,000

Bonds payable

400,000

—

Common stock, $10 par value

400,000

400,000

Retained earnings

374,000

307,600

Total liabilities and

stockholders’ equity

$1,641,600

$1,584,800

2. Using
the forms below, prepare common-size income statements and balance sheets for
20×7 and 20×8 (40 points)

Sanborn Corporation

Common-Size Income Statements

For the Years Ended December 31, 20×8 and 20×7

20×8

20×7

Net sales

Cost of goods sold

Gross margin

Operating expenses

Selling expenses

Administrative expenses

Total operating expenses

Income from operations

Interest expense

Income before income taxes

Income taxes expense

Net income

Sanborn Corporation

Common-Size Balance Sheets

December 31, 20×8 and 20×7

20×8

20×7

Assets

Cash

Accounts receivable (net)

Inventory

Property, plant, and equipment (net)

Total assets

Liabilities
and Stockholders’ Equity

Accounts payable

Notes payable (short-term)

Bonds payable

Common stock, $10 par value

Retained earnings

Total liabilities and stockholders’
equity

3. Comment
on the results in requirements 1 and 2 by indentifying favorable and
unfavorable changes in the components and composition of the statements. (30
points)

This is the end of Assignment 08.

Reviews

There are no reviews yet.

Be the first to review “BU330 Accounting for Managers assignment 8”

Your email address will not be published. Required fields are marked *