Answer the following question.
| Gonser McGiller Corporation |
| Trial Balance (000's) |
|
|
|
|
|
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|
December 31, |
|
|
2013 |
|
2012 |
|
2011 |
|
debit |
credit |
|
debit |
credit |
|
debit |
credit |
| Cash |
125,000 |
|
|
300,000 |
|
|
300,000 |
|
| Accounts Receivable |
450,000 |
|
|
280,000 |
|
|
150,000 |
|
| Merchandise Inventory |
250,000 |
|
|
200,000 |
|
|
125,000 |
|
| Prepaid Insurance |
10,000 |
|
|
10,000 |
|
|
0 |
|
| Building |
1,800,000 |
|
|
1,500,000 |
|
|
1,500,000 |
|
| Accum. Depreciation |
|
100,000 |
|
|
90,000 |
|
|
80,000 |
| Equipment |
200,000 |
|
|
200,000 |
|
|
200,000 |
|
| Accum. Depreciation |
|
100,000 |
|
|
80,000 |
|
|
60,000 |
| Notes Payable |
|
50,000 |
|
|
0 |
|
|
0 |
| Accounts Payable |
|
225,000 |
|
|
80,000 |
|
|
75,000 |
| Retained Earnings |
|
715,000 |
|
|
570,000 |
|
|
400,000 |
| Capital Stock |
|
1,500,000 |
|
|
1,500,000 |
|
|
1,470,000 |
| Sales |
|
1,000,000 |
|
|
800,000 |
|
|
600,000 |
| Sales Returns & Allow. |
80,000 |
|
|
25,000 |
|
|
10,000 |
|
| Sales Discounts |
15,000 |
|
|
5,000 |
|
|
5,000 |
|
| Cost of Goods Sold |
350,000 |
|
|
250,000 |
|
|
100,000 |
|
| Advertising |
35,000 |
|
|
25,000 |
|
|
15,000 |
|
| Sales Salaries |
60,000 |
|
|
45,000 |
|
|
40,000 |
|
| Delivery Expense |
10,000 |
|
|
5,000 |
|
|
5,000 |
|
| Administrative Salaries |
120,000 |
|
|
80,000 |
|
|
40,000 |
|
| Depreciation Expense |
30,000 |
|
|
30,000 |
|
|
30,000 |
|
| Rent |
40,000 |
|
|
40,000 |
|
|
40,000 |
|
| Postage |
30,000 |
|
|
25,000 |
|
|
20,000 |
|
| Insurance Expense |
20,000 |
|
|
25,000 |
|
|
25,000 |
|
| Income Taxes |
65,000 |
|
|
75,000 |
|
|
80,000 |
|
|
3,690,000 |
3,690,000 |
|
3,120,000 |
3,120,000 |
|
2,685,000 |
2,685,000 |
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| REQUIRED: |
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| 1. PREPARE A COMPARATIVE MULTI-STEP INCOME STATEMENT FOR THESE THREE YEARS. INCLUDE |
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| VERTICAL ANALYSIS i.e. SHOW EACH AMOUNT ALSO AS A % OF SALES. INCLUDE THE |
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| EARNINGS PER SHARE (EPS) FOR EACH YEAR. THERE WERE 100,000 SHARES OF COMMON STOCK |
| ISSUED AND OUTSTANDING. |
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| 2. WHAT SEEMS TO BE HAPPENING TO THE COMPANY'S OPERATING RESULTS? WHY? USE |
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| WHATEVEVER RATIOS ARE RELEVANT TO EMPHASIZE YOUR CONCLUSION. |