LOGIC COMPANY Comparative Income Statement For Years Ended December 31, 2017 and 2018 2018 2017 Gross sales $ 20,000 $ 15,750 Sales returns and allowances 800 100 Net sales $ 19,200 $ 15,650 Cost of merchandise (goods) sold 11,750 8,750 Gross profit $ 7,450 $ 6,900 Operating expenses: Depreciation $ 800 $ 650 Selling and administrative 2,950 2,500 Research 650 550 Miscellaneous 460 350 Total operating expenses $ 4,860 $ 4,050 Income before interest and taxes $ 2,590 $ 2,850 Interest expense 660 550 Income before taxes $ 1,930 $ 2,300 Provision for taxes 772 920 Net income $ 1,158 $ 1,380 LOGIC COMPANY Comparative Balance Sheet December 31, 2017 and 2018 2018 2017 Assets Current assets: Cash $ 12,500 $ 9,400 Accounts receivable 17,000 13,000 Merchandise inventory 9,000 14,500 Prepaid expenses 24,500 10,500 Total current assets $ 63,000 $ 47,400 Plant and equipment: Building (net) $ 15,000 $ 11,500 Land 14,000 9,500 Total plant and equipment $ 29,000 $ 21,000 Total assets $ 92,000 $ 68,400 Liabilities Current liabilities: Accounts payable $ 13,500 $ 7,400 Salaries payable 7,600 5,500 Total current liabilities $ 21,100 $ 12,900 Long-term liabilities: Mortgage note payable 22,500 21,000 Total liabilities $ 43,600 $ 33,900 Stockholders’ Equity Common stock $ 21,500 $ 21,500 Retained earnings 26,900 13,000 Total stockholders’ equity $ 48,400 $ 34,500 Total liabilities and stockholders’ equity $ 92,000 $ 68,400 Calculate net income (after tax) to the net sales. (Round your answers to the nearest hundredth.)

LOGIC COMPANY Comparative Income Statement For Years Ended December 31, 2017 and 2018 2018 2017 Gross sales $ 20,000 $ 15,750 Sales returns and allowances 800 100 Net sales $ 19,200 $ 15,650 Cost of merchandise (goods) sold 11,750 8,750 Gross profit $ 7,450 $ 6,900 Operating expenses: Depreciation $ 800 $ 650 Selling and administrative 2,950 2,500 Research 650 550 Miscellaneous 460 350 Total operating expenses $ 4,860 $ 4,050 Income before interest and taxes $ 2,590 $ 2,850 Interest expense 660 550 Income before taxes $ 1,930 $ 2,300 Provision for taxes 772 920 Net income $ 1,158 $ 1,380 LOGIC COMPANY Comparative Balance Sheet December 31, 2017 and 2018 2018 2017 Assets Current assets: Cash $ 12,500 $ 9,400 Accounts receivable 17,000 13,000 Merchandise inventory 9,000 14,500 Prepaid expenses 24,500 10,500 Total current assets $ 63,000 $ 47,400 Plant and equipment: Building (net) $ 15,000 $ 11,500 Land 14,000 9,500 Total plant and equipment $ 29,000 $ 21,000 Total assets $ 92,000 $ 68,400 Liabilities Current liabilities: Accounts payable $ 13,500 $ 7,400 Salaries payable 7,600 5,500 Total current liabilities $ 21,100 $ 12,900 Long-term liabilities: Mortgage note payable 22,500 21,000 Total liabilities $ 43,600 $ 33,900 Stockholders’ Equity Common stock $ 21,500 $ 21,500 Retained earnings 26,900 13,000 Total stockholders’ equity $ 48,400 $ 34,500 Total liabilities and stockholders’ equity $ 92,000 $ 68,400 Calculate net income (after tax) to the net sales. (Round your answers to the nearest hundredth.)

Functions and Change: A Modeling Approach to College Algebra (MindTap Course List)

6th Edition

ISBN:9781337111348

Author:Bruce Crauder, Benny Evans, Alan Noell

Publisher:Bruce Crauder, Benny Evans, Alan Noell

Chapter3: Straight Lines And Linear Functions

Section3.3: Modeling Data With Linear Functions

Problem 22E

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LOGIC COMPANY
Comparative Income Statement
For Years Ended December 31, 2017 and 2018

	2018	2017
Gross sales	$	20,000	$	15,750
Sales returns and allowances		800		100
Net sales	$	19,200	$	15,650
Cost of merchandise (goods) sold		11,750		8,750
Gross profit	$	7,450	$	6,900
Operating expenses:
Depreciation	$	800	$	650
Selling and administrative		2,950		2,500
Research		650		550
Miscellaneous		460		350
Total operating expenses	$	4,860	$	4,050
Income before interest and taxes	$	2,590	$	2,850
Interest expense		660		550
Income before taxes	$	1,930	$	2,300
Provision for taxes		772		920
Net income	$	1,158	$	1,380

LOGIC COMPANY
Comparative Balance Sheet
December 31, 2017 and 2018

	2018	2017
Assets
Current assets:
Cash	$	12,500	$	9,400
Accounts receivable		17,000		13,000
Merchandise inventory		9,000		14,500
Prepaid expenses		24,500		10,500
Total current assets	$	63,000	$	47,400
Plant and equipment:
Building (net)	$	15,000	$	11,500
Land		14,000		9,500
Total plant and equipment	$	29,000	$	21,000
Total assets	$	92,000	$	68,400
Liabilities
Current liabilities:
Accounts payable	$	13,500	$	7,400
Salaries payable		7,600		5,500
Total current liabilities	$	21,100	$	12,900
Long-term liabilities:
Mortgage note payable		22,500		21,000
Total liabilities	$	43,600	$	33,900
Stockholders’ Equity
Common stock	$	21,500	$	21,500
Retained earnings		26,900		13,000
Total stockholders’ equity	$	48,400	$	34,500
Total liabilities and stockholders’ equity	$	92,000	$	68,400

Calculate net income (after tax) to the net sales. (Round your answers to the nearest hundredth.)

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