CCC13 The comparative balance sheet of Cookie & Coffee Creations Inc. at October
ID: 2473237 • Letter: C
Question
CCC13 The comparative balance sheet of Cookie & Coffee Creations Inc. at October 31, 2018 for the years 2018 and 2017, and the income statements for the years ended October 31, 2017 and 2018, are presented below.
COOKIE & COFFEE CREATIONS INC.
Balance Sheet
October 31
Assets
2018
2017
Cash
$ 22,324
$ 5,550
Accounts receivable
3,250
2,710
Inventory
7,897
7,450
Prepaid expenses
5,800
6,050
Equipment
102,000
75,500
Accumulated depreciation
(25,200)
(9,100)
Total assets
$116,071
$88,160
Liabilities and Stockholders’ Equity
Accounts payable
$ 1,150
$ 2,450
Income taxes payable
9,251
7,200
Dividends payable
27,000
27,000
Salaries and wages payable
7,250
1,280
Interest payable
188
0
Note payable—current portion
4,000
0
Note payable—long-term portion
6,000
0
Preferred stock, no par, $6 cumulative—
3,000 and 2,800 shares issued,
respectively
15,000
14,000
Common stock, $1 par—25,180
shares issued
25,180
25,180
Additional paid in capital—treasury stock
250
250
Retained earnings
20,802
10,800
Total liabilities and stockholders’ equity
$116,071
$88,160
COOKIE & COFFEE CREATIONS INC.
Income Statement
Year Ended October 31
2018
2017
Sales
$485,625
$462,500
Cost of goods sold
222,694
208,125
Gross profit
262,931
254,375
Operating expenses
Salaries and wages expense
147,979
146,350
Depreciation expense
17,600
9,100
Other operating expenses
48,186
42,925
Total operating expenses
213,765
198,375
Income from operations
49,166
56,000
Other expenses
Interest expense
413
0
Loss on disposal of plant assets
2,500
0
Total other expenses
2,913
0
Income before income tax
46,253
56,000
Income tax expense
9,251
14,000
Net income
$ 37,002
$ 42,000
Instructions
(c) Prepare a vertical analysis of the income statement for Cookie & Coffee Creations Inc. for 2018 and 2017.
Assets
2018
2017
Cash
$ 22,324
$ 5,550
Accounts receivable
3,250
2,710
Inventory
7,897
7,450
Prepaid expenses
5,800
6,050
Equipment
102,000
75,500
Accumulated depreciation
(25,200)
(9,100)
Total assets
$116,071
$88,160
Liabilities and Stockholders’ Equity
Accounts payable
$ 1,150
$ 2,450
Income taxes payable
9,251
7,200
Dividends payable
27,000
27,000
Salaries and wages payable
7,250
1,280
Interest payable
188
0
Note payable—current portion
4,000
0
Note payable—long-term portion
6,000
0
Preferred stock, no par, $6 cumulative—
3,000 and 2,800 shares issued,
respectively
15,000
14,000
Common stock, $1 par—25,180
shares issued
25,180
25,180
Additional paid in capital—treasury stock
250
250
Retained earnings
20,802
10,800
Total liabilities and stockholders’ equity
$116,071
$88,160
Explanation / Answer
Cookie & Coffee Creations Inc.
Comparative Income Statement
For the year ended October 2017 and 2018
Cost of goods sold
2018 : (222,694 / 485,625) * 100 = 45.9%
2017 : (208,125 / 462,500) * 100 = 45%
2018 2017 Amount ($) Percent Amount ($) Percent Sales 485,625 100.0% 462,500 100.0% Cost of Goods Sold 222,694 45.9% 208,125 45% Gross Profit 262,931 54.1% 254,375 55% Operating Expenses Salaries and wages expense 147,979 30.5% 146,350 31.6% Depreciation Expense 17,600 3.6% 9,100 2% Other Operating Expense 48,186 10% 42,925 9.3% Total Operating Expenses 213,765 44% 198,375 42.9% Income from Operations 49,166 10.1% 56,000 12.1% Other Expenses Interest Expense 413 0.1% 0 0 Loss on disposal of plant assets 2,500 0.5% 0 0 Total other expenses 2,913 0.6% 0 0 Income before Income tax 46,253 9.5% 56,000 12.1% Income tax expense 9,251 1.9% 14,000 3.0% Net Income 37,002 7.6% 42,000 9.1%Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.