Copy of Part 2 Rain Paint-1.xlsx - Rainbow Paint Co.s...

Rain Paint Co.
Comparative Income Statement
For the Years Ended December 31, 2016 and 2015
2016 2015
Sales 5,000,000 3,200,000
Cost of goods sold 3,400,000 2,080,000
Gross Profit 1,600,000 1,120,000
Selling expenses 650,000 464,000
Administrative expenses 325,000 224,000
Total operating expenses 975,000 688,000
Income from operations 625,000 432,000
Other income 25,000 19,200
650,000 451,200
Other expense (interest) 105,000 64,000
Income before income tax 545,000 387,200
Income tax expense 300,000 176,000
Net income 245,000 211,200
Rain Paint Co.
Comparative Retainined Earnings Statement
For the Years Ended December 31, 2016 and 2015
2016 2015
Retained earnings, January 1 723,000 581,800
Add net income for year 245,000 211,200
Total 968,000 793,000
Deduct dividends:
On preferred stock 40,000 40,000
On common stock 45,000 30,000
Total 85,000 70,000
Retained earnings, December 31 883,000 723,000
Rainbow Paint Co.’s comparative financial statements for the years ending
December 31, 2016 and 2015, are as follows. The market price of Rainbow
Paint Co.’s common stock was $25 on December 31, 2016, and $30 on
December 31, 2015.

Rain Paint Co.
Comparative Balance Sheet
December 31, 2016 and 2015
Dec. 31, 2016 Dec. 31, 2015
Assets
Current assets: