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    Collins and Wilson Company Financial Analysis

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    1. Condensed data taken from the ledger of Collins Company at December 31, 2006, and 2007, are as follows:

    2007 2006

    Current assets $ 200,000 $ 180,000

    Property, plant and equipment 450,000 400,000

    Intangible assets 20,700 30,000

    Current liabilities 70,000 80,000

    Long-term liabilities 200,000 250,000

    Common Stock 275,000 200,000

    Retained Earnings 125,700 80,000

    Prepare a comparative balance sheet, with horizontal analysis, for December 31. 2006 and 2007. (Round percents to one decimal point.)

    2. Revenue and expense data for Wilson Company are as follows:

    2006 2005

    Administrative expenses $ 24,750 $ 18,000

    Cost of goods sold 487,500 375,000

    Income Tax 15,000 12,000

    Net sales 750,000 600,000

    Selling expenses 182,500 154,800

    (a) Prepare a comparative income statement, with vertical analysis, stating each item for both 2006 and 2005 as a percent of sales.

    (b) Comment upon the significant changes disclosed by the comparative income statement.

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    Solution Summary

    1. Condensed data taken from the ledger of Collins Company at December 31, 2006, and 2007, are as follows:

    2007 2006

    Current assets $ 200,000 $ 180,000

    Property, plant and equipment 450,000 400,000

    Intangible assets 20,700 30,000

    Current liabilities 70,000 80,000

    Long-term liabilities 200,000 250,000

    Common Stock 275,000 200,000

    Retained Earnings 125,700 80,000

    Prepare a comparative balance sheet, with horizontal analysis, for December 31. 2006 and 2007. (Round percents to one decimal point.)

    2. Revenue and expense data for Wilson Company are as follows:

    2006 2005

    Administrative expenses $ 24,750 $ 18,000

    Cost of goods sold 487,500 375,000

    Income Tax 15,000 12,000

    Net sales 750,000 600,000

    Selling expenses 182,500 154,800

    (a) Prepare a comparative income statement, with vertical analysis, stating each item for both 2006 and 2005 as a percent of sales.

    (b) Comment upon the significant changes disclosed by the comparative income statement.

    $2.19

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