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a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. Round your answers to the nearest whole percenta Innovation Quarter Inc. Comparative Income Statement For the Years Ended December 31 Current year Current year Previous year Previous year Amount Percent Amount Percent Line Item Description Sales Cost of goods sold $4,000,000 (2,280,000) Selling expenses $(600,000) Administrative expenses (520,000) Income tax expense 10:00 (240,000) % % % | # % **** $3,600,000 (1,872,000) $(648,000) (360,000) (216,000) % % % % % löödd

a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. Round your answers to the nearest whole percenta Innovation Quarter Inc. Comparative Income Statement For the Years Ended December 31 Current year Current year Previous year Previous year Amount Percent Amount Percent Line Item Description Sales Cost of goods sold $4,000,000 (2,280,000) Selling expenses $(600,000) Administrative expenses (520,000) Income tax expense 10:00 (240,000) % % % | # % **** $3,600,000 (1,872,000) $(648,000) (360,000) (216,000) % % % % % löödd

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Cost of goods sold Selling expenses Administrative expenses Income tax expense Line Item Description a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. Round your answers to the nearest whole percentage. Innovation Quarter Inc. Comparative Income Statement For the Years Ended December 31 Sales Cost of goods sold Selling expenses Administrative expenses 2,280,000 600,000 $20,000 240,000 Income tax expense Current year Current year Previous year Previous year Amount Percent Amount Percent $4,000,000 (2,280,000) $(600,000) (520,000) (240,000) % % % # 1,872,000 648,000 360,000 216,000 Me 36 $3,600,000 (1,872,000) $(648,000) (360,000) (216,000) b. The vertical analysis indicates that the cost of goods sold as a percent of sales by 3 percentage points, and administrative expenses by 5 percentage points. % % % % % 24 % % % by 5 percentage points, while selling expenses by 3 percentage points. Thus, net income as a percent of sales
Transcribed Image Text:Cost of goods sold Selling expenses Administrative expenses Income tax expense Line Item Description a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. Round your answers to the nearest whole percentage. Innovation Quarter Inc. Comparative Income Statement For the Years Ended December 31 Sales Cost of goods sold Selling expenses Administrative expenses 2,280,000 600,000 $20,000 240,000 Income tax expense Current year Current year Previous year Previous year Amount Percent Amount Percent $4,000,000 (2,280,000) $(600,000) (520,000) (240,000) % % % # 1,872,000 648,000 360,000 216,000 Me 36 $3,600,000 (1,872,000) $(648,000) (360,000) (216,000) b. The vertical analysis indicates that the cost of goods sold as a percent of sales by 3 percentage points, and administrative expenses by 5 percentage points. % % % % % 24 % % % by 5 percentage points, while selling expenses by 3 percentage points. Thus, net income as a percent of sales
Vertical analysis of income statement Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Current Year Previous Year $3,600,000 1,872,000 648,000 360,000 216,000 Sales Cost of goods sold Selling expenses Administrative expenses Income tax expense Line Item Description a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. Round your answers to the nearest whole percentage. Innovation Quarter Inc. Comparative Income Statement For the Years Ended December 31 Sales Cost of goods sold Selling expenses Administrative expenses 4 Income tax expense $4,000,000 2,280,000 600,000 $20,000 240,000 Current year Current year Previous year Previous year Amount Percent Amount Percent $4,000,000 (2,280,000) $(600,000) (520,000) (240,000) % % % % * * * % % % % % $3,600,000 (1,872,000) $(648,000) (360,000) (216,000) % * * * % **** % %
Transcribed Image Text:Vertical analysis of income statement Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Current Year Previous Year $3,600,000 1,872,000 648,000 360,000 216,000 Sales Cost of goods sold Selling expenses Administrative expenses Income tax expense Line Item Description a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. Round your answers to the nearest whole percentage. Innovation Quarter Inc. Comparative Income Statement For the Years Ended December 31 Sales Cost of goods sold Selling expenses Administrative expenses 4 Income tax expense $4,000,000 2,280,000 600,000 $20,000 240,000 Current year Current year Previous year Previous year Amount Percent Amount Percent $4,000,000 (2,280,000) $(600,000) (520,000) (240,000) % % % % * * * % % % % % $3,600,000 (1,872,000) $(648,000) (360,000) (216,000) % * * * % **** % %
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