Prepare a comparative multi-step income statement for these

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Reference no: EM13482744

Answer the following question.

Gonser McGiller Corporation
Trial Balance (000's)

	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


REQUIRED:
1. PREPARE A COMPARATIVE MULTI-STEP INCOME STATEMENT FOR THESE THREE YEARS. INCLUDE
VERTICAL ANALYSIS i.e. SHOW EACH AMOUNT ALSO AS A % OF SALES. INCLUDE THE
EARNINGS PER SHARE (EPS) FOR EACH YEAR. THERE WERE 100,000 SHARES OF COMMON STOCK
ISSUED AND OUTSTANDING.

2. WHAT SEEMS TO BE HAPPENING TO THE COMPANY'S OPERATING RESULTS? WHY? USE
WHATEVEVER RATIOS ARE RELEVANT TO EMPHASIZE YOUR CONCLUSION.

Reference no: EM13482744

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