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Vertical Analysis of Comparative Financial Statements

Amounts from the comparative income statement and balance sheet of Miller Electronics Corporation for the last two years are as follows:

Miller Electronics Corporation Comparative Income Statement For Years Ended December 31, 20-2 and 20-1
	20-2		20-1
Net Sales (all on account)		$655,750		$428,850
Cost of goods sold		393,340		258,860
Gross profit		$262,410		$169,990
Administrative expenses		$65,419		$43,162
Selling expenses		66,387		43,799
Total operating expenses		$131,806		$86,961
Operating income		$130,604		$83,029
Interest expense		1,264		1,171
Income before income taxes		$129,340		$81,858
Income tax expense		31,096		12,603
Net income		$98,244		$69,255

Miller Electronics Corporation Comparative Balance Sheet December 31, 20-2 and 20-1
	20-2		20-1
Assets
Current assets:
Cash		$43,208		$22,679
Receivables (net)		74,467		47,710
Merchandise inventory		89,680		49,577
Supplies and prepayments		3,683		1,148
Total current assets		$211,038		$121,114
Property, plant, and equipment:
Office equipment (net)		$11,667		$8,080
Factory equipment (net)		105,880		71,850
Total property, plant, and equipment		$117,547		$79,930
Total assets		$328,585		$201,044
Liabilities
Current liabilities
Notes payable		$9,900		$6,100
Accounts payable		42,581		29,943
Accrued and withheld payroll taxes		6,396		5,566
Total current liabilities		$58,877		$41,609
Stockholders' Equity
Common stock ($10 par)		$100,000		$84,000
Retained earnings		169,708		75,435
Total stockholders' equity		$269,708		$159,435
Total liabilities and stockholders' equity		$328,585		$201,044

Required:

Prepare a vertical analysis of the income statement and balance sheet. Show each item on the income statement as a percentage of the net sales for each year. On the balance sheet, show each asset item as a percentage of the total assets and each liability and equity item as a percentage of the total liabilities and stockholders' equity. Round percentages to one decimal place. Do not enter the percent sign. For example, 60% would be entered as 60.

Miller Electronics Corporation
Comparative Income Statement
For Years Ended December 31, 20-2 and 20-1
	20-2 Amount	20-2 Percent	20-1 Amount	20-1 Percent
Net sales (all on account)	$655,750		$428,850
Cost of goods sold	393,340		258,860
Gross profit	$262,410		$169,990
Administrative expenses	$65,419		$43,162
Selling expenses	66,387		43,799
Total operating expenses	$131,806		$86,961
Operating income	$130,604		$83,029
Interest expense	1,264		1,171
Income before income taxes	$129,340		$81,858
Income tax expense	31,096		12,603
Net income	$98,244		$69,255

Miller Electronics Corporation
Comparative Balance Sheet
December 31, 20-2 and 20-1
Assets
	20-2 Amount	20-2 Percent	20-1 Amount	20-1 Percent
Current assets:
Cash	$43,208		$22,679
Receivables (net)	74,467		47,710
Merchandise inventory	89,680		49,577
Supplies and prepayments	3,683		1,148
Total current assets	$211,038		$121,114
Property, plant, and equipment:
Office equipment (net)	$11,667		$8,080
Factory equipment (net)	105,880		71,850
Total prop., plant, and equip.	$117,547		$79,930
Total assets	$328,585		$201,044
Liabilities
Current liabilities:
Notes payable	$9,900		$6,100
Accounts payable	42,581		29,943
Accrued and withheld payroll taxes	6,396		5,566
Total current liabilities	$58,877		$41,609
Stockholders' Equity
Common stock ($10 par)	$100,000		$84,000
Retained earnings	169,708		75,435
Total stockholders' equity	$269,708		$159,435
Total liab. and stockholders' equity	$328,585		$201,044

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