Revenue and expense data for Searle Technologies Co. are as follows: 20Y8 20Y7 Sales $900,000 $725,000 Cost of goods sold 558,000 435,000 Selling expenses 117,000 116,000 Administrative expenses 63,000 65,250 Income tax expense 76,500 58,000 a. Prepare an income statement in comparative form, stating each item for both 20Y8 and 20Y7 as a percent of sales. Round to one decimal place. Searle Technologies Co. Comparative Income Statement For the Years Ended December 31, 20Y8 and 20Y7 20Y8 Amount 20Y8 Percent 20Y7 Amount 20Y7 Percent $fill in the blank 9441f0095009007_2 fill in the blank 9441f0095009007_3% $fill in the blank 9441f0095009007_4 fill in the blank 9441f0095009007_5% fill in the blank 9441f0095009007_7 fill in the blank 9441f0095009007_8% fill in the blank 9441f0095009007_9 fill in the blank 9441f0095009007_10% Gross profit $fill in the blank 9441f0095009007_11 fill in the blank 9441f0095009007_12% $fill in the blank 9441f0095009007_13 fill in the blank 9441f0095009007_14% $fill in the blank 9441f0095009007_16 fill in the blank 9441f0095009007_17% $fill in the blank 9441f0095009007_18 fill in the blank 9441f0095009007_19% fill in the blank 9441f0095009007_21 fill in the blank 9441f0095009007_22% fill in the blank 9441f0095009007_23 fill in the blank 9441f0095009007_24% Total operating expenses $fill in the blank 9441f0095009007_25 fill in the blank 9441f0095009007_26% $fill in the blank 9441f0095009007_27 fill in the blank 9441f0095009007_28% $fill in the blank 9441f0095009007_30 fill in the blank 9441f0095009007_31% $fill in the blank 9441f0095009007_32 fill in the blank 9441f0095009007_33% fill in the blank 9441f0095009007_35 fill in the blank 9441f0095009007_36% fill in the blank 9441f0095009007_37 fill in the blank 9441f0095009007_38% Net income $fill in the blank 9441f0095009007_39 fill in the blank 9441f0095009007_40% $fill in the blank 9441f0095009007_41 fill in the blank 9441f0095009007_42%
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
Revenue and expense data for Searle Technologies Co. are as follows:
| 20Y8 | 20Y7 | ||||
| Sales | $900,000 | $725,000 | |||
| Cost of goods sold | 558,000 | 435,000 | |||
| Selling expenses | 117,000 | 116,000 | |||
| Administrative expenses | 63,000 | 65,250 | |||
| Income tax expense | 76,500 | 58,000 |
a. Prepare an income statement in comparative form, stating each item for both 20Y8 and 20Y7 as a percent of sales. Round to one decimal place.
| Searle Technologies Co. | ||||
| Comparative Income Statement | ||||
| For the Years Ended December 31, 20Y8 and 20Y7 | ||||
| 20Y8 Amount | 20Y8 Percent | 20Y7 Amount | 20Y7 Percent | |
| $fill in the blank 9441f0095009007_2 | fill in the blank 9441f0095009007_3% | $fill in the blank 9441f0095009007_4 | fill in the blank 9441f0095009007_5% | |
| fill in the blank 9441f0095009007_7 | fill in the blank 9441f0095009007_8% | fill in the blank 9441f0095009007_9 | fill in the blank 9441f0095009007_10% | |
| Gross profit | $fill in the blank 9441f0095009007_11 | fill in the blank 9441f0095009007_12% | $fill in the blank 9441f0095009007_13 | fill in the blank 9441f0095009007_14% |
| $fill in the blank 9441f0095009007_16 | fill in the blank 9441f0095009007_17% | $fill in the blank 9441f0095009007_18 | fill in the blank 9441f0095009007_19% | |
| fill in the blank 9441f0095009007_21 | fill in the blank 9441f0095009007_22% | fill in the blank 9441f0095009007_23 | fill in the blank 9441f0095009007_24% | |
| Total operating expenses | $fill in the blank 9441f0095009007_25 | fill in the blank 9441f0095009007_26% | $fill in the blank 9441f0095009007_27 | fill in the blank 9441f0095009007_28% |
| $fill in the blank 9441f0095009007_30 | fill in the blank 9441f0095009007_31% | $fill in the blank 9441f0095009007_32 | fill in the blank 9441f0095009007_33% | |
| fill in the blank 9441f0095009007_35 | fill in the blank 9441f0095009007_36% | fill in the blank 9441f0095009007_37 | fill in the blank 9441f0095009007_38% | |
| Net income | $fill in the blank 9441f0095009007_39 | fill in the blank 9441f0095009007_40% | $fill in the blank 9441f0095009007_41 | fill in the blank 9441f0095009007_42% |
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