Farris Company Ratzlaff Company 2015 2014 2015 2014 Condensed Income Statement F
ID: 2427282 • Letter: F
Question
Farris Company
Ratzlaff Company
2015
2014
2015
2014
Condensed Income Statement
For the Year Ended December 31, 2015
Farris Company
Ratzlaff Company
Dollars
Percent
Dollars
Percent
Farris Company
Ratzlaff Company
Comparative statement data for Farris Company and Ratzlaff Company, two competitors, appear below. All balance sheet data are as of December 31, 2015, and December 31, 2014.Farris Company
Ratzlaff Company
2015
2014
2015
2014
Net sales $1,596,906 $339,271 Cost of goods sold 1,000,486 240,861 Operating expenses 304,298 79,065 Interest expense 8,450 2,790 Income tax expense 54,088 6,520 Current assets 326,383 $310,908 83,669 $ 79,725 Plant assets (net) 520,441 498,981 138,699 123,074 Current liabilities 65,731 74,318 35,908 29,682 Long-term liabilities 108,802 89,899 30,616 24,022 Common stock, $10 par 503,000 503,000 120,000 120,000 Retained earnings 169,291 142,672 35,844 29,095Explanation / Answer
Condensed Income Statement Farris Company Ratzlaff Company 2015 Percent 2015 Percent Net sales 15,96,906 100.00% 3,39,271 100.00% Cost of goods sold 10,00,486 62.65% 2,40,861 70.99% Gross profit 5,96,420 37.35% 98,410 29.01% Operating expenses 3,04,298 19.06% 79,065 23.30% Income from operations 2,92,122 18.29% 19,345 5.70% Other expenses and losses Interest expense 8,450 0.53% 2,790 0.82% Income before income taxes 2,83,672 17.76% 16,555 4.88% Income tax expense 54,088 3.39% 6,520 1.92% Net income 2,29,584 14.38% 10,035 2.96% Farris Company Ratliff Company 2015 2014 2015 2014 Current assets 3,26,383 3,10,908 83,669 79,725 Plant assets (net) 5,20,441 4,98,981 1,38,699 1,23,074 TOTAL Asset 8,46,824 8,09,889 2,22,368 2,02,799 Average Asset 8,28,357 2,12,584 Common stock, $10 par 5,03,000 5,03,000 1,20,000 1,20,000 Retained earnings 1,69,291 1,42,672 35,844 29,095 stockholders’ equity: 6,72,291 6,45,672 1,55,844 1,49,095 Average stockholders’ equity: 658982 152470 Net Income 2,29,584 10,035 ROA Net Income/(Average Asset) 27.7% 4.7% Return on common stockholders’ equity Net Income/(Average Stockholders’ equity) 34.8% 6.58%
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