I. Prepare a common size balance sheet and income statement.

Elllustration 1: Income Statement Anetek Chemical Corporation INCOME STATEMENT For the Year Ended December 31 (000 Omitted) 2007 2006 Sales and other revenue Net sales $1,600,000 $1,350,000 Interest revenue 25,000 20,000 Other revenue 50,000 30,000 Total revenue 1,675,000 1,400,000 Cost and other charges Cost of goods sold 1,000,000 850,000 Depreciation and amortization 150,000 150,000 Selling and administrative expenses 225,000 150,000 Interest expense 50,000 25,000 1,425,000 1,175,000 Income before taxes 250,000 225,000 Income taxes 100,000 75,000 Net income $150,000 $150,000 Earnings per sharea $5.00 $5.00 a Additional information: Number of shares outstanding in 2006 and 2007 is 30 million shares. Market price of Aneteks stock at end of 2007 is $60. Cash dividend per share in 2007 is $2.25. Correction of error in prior period $4.5 million. Net Cash provided by operating activities in 2007 is $350,000 Total 2006 $ 25,000 75,000 300,000 250,000 650,000 325,000 Anetek Chemical Corporation CONSOLIDATED BALANCE SHEET December 31 (000 omitted) Assets 2007 Current assets Cash $ 40,000 Marketable securities 100,000 Accounts receivable 350,000 Inventories (at lower of cost or market) 310,000 Total current assets 800,000 Investments (at fair value) 300,000 Fixed assets Property, plant, and equipment (at cost) 2,000,000 Less-accumulated depreciation (900,000) 1,100,000 Goodwill 50,000 Total assets $2,250,000 Liabilities and Stockholders' Equity Current liabilities Accounts payable $ 125,000 Notes payable 250,000 Accrued and other liabilities 200,000 Total current liabilities 575,000 Long-term debt Bonds and notes payable 725,000 Total liabilities 1,300,000 Stockholders' equity Common stock, $5 par 150,000 Additional paid-in capital 550,000 Retained earnings 250,000 Total equity 950,000 Total debt and equity $2,250,000 1,900,000 (800,000) 1,100,000 25,000 $2,100,000 $ 100,000 200,000 150,000 450,000 782,500 1,232,500 150,000 550,000 167,500 867,500 $2,100,000 The notes and some detail that accompanied this statement are excluded for purposes of simplicity and brevity