Chapter 11
Financial Statement Analysis
559
AP-16A (
3
4
5
)
Chicken Inc. and Egg Inc. are both in the toy retail business. All sales are on credit. Below is
select financial information for the current year.
Chicken Inc.
Egg Inc.
Income Statement
Sales
$150,000
$135,000
Cost of Goods Sold
48,750
41,850
Gross Profit
101,250
93,150
Expenses
Salaries Expense
22,500
27,000
Depreciation Expense
15,000
13,500
Advertising Expense
7,500
6,750
Interest Expense
6,750
5,130
Total Expenses
51,750
52,380
Net Income before Taxes
49,500
40,770
Income Tax Expense
26,250
24,300
Net Income
$23,250
$16,470
Balance Sheet
Cash
$40,850
$24,510
Accounts Receivable
15,000
9,000
Inventory
34,500
20,125
Equipment
85,800
51,480
Total Assets
$176,150
$105,115
Accounts Payable
21,000
32,000
Unearned Revenue
27,800
18,670
Long-Term Liabilities
39,350
15,635
Shareholders' Equity
88,000
38,810
Total Liabilities and Shareholders' Equity
$176,150
$105,115
