Comparative Income Statements Consider the following income statement data from the Ross Company: Current Year Previous Year $525,000 $451,000 336,000 280,000 105,000 100,000 60,000 55,000 7,800 6,400 Sales revenue Cost of goods sold Selling expenses Administrative expenses Income tax expense Prepare a comparative income statement, showing increases and decreases in dollars and in percentages. Note: Round "Percent Change" answers to one decimal place (ex: 0.2345 = 23.5%). ROSS COMPANY Comparative Income Statements Sales Revenue Cost of Goods Sold ◆ ◆ Selling Expenses Administrative Expenses Current Year Previous Year (Decrease) $ Total Income before Income Taxes ◆ ◆ $ $ $ $ Increase Percent Change $ % % % % % % % % %

Comparative Income Statements Consider the following income statement data from the Ross Company: Current Year Previous Year $525,000 $451,000 336,000 280,000 105,000 100,000 60,000 55,000 7,800 6,400 Sales revenue Cost of goods sold Selling expenses Administrative expenses Income tax expense Prepare a comparative income statement, showing increases and decreases in dollars and in percentages. Note: Round "Percent Change" answers to one decimal place (ex: 0.2345 = 23.5%). ROSS COMPANY Comparative Income Statements Sales Revenue Cost of Goods Sold ◆ ◆ Selling Expenses Administrative Expenses Current Year Previous Year (Decrease) $ Total Income before Income Taxes ◆ ◆ $ $ $ $ Increase Percent Change $ % % % % % % % % %

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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Conduct a vertical and horizontal analysis in the given data
Vertical Analysis of Income Statement Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Current Year Previous Year Sales Cost of merchandise sold Selling expenses Administrative expenses Income tax expense Sales a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. If required, round percentages to one decimal place. Enter all amounts as positive numbers. Innovation Quarter Inc. Comparative Income Statement For the Years Ended December 31 Current year Amount Current year Percent $388,000 100 248,320 Cost of merchandise sold Gross profit Selling expenses Administrative expenses Total operating expenses Income from operations Income tax expense $388,000 248,320 54,320 62,080 7,760 Net income $353,000 208,270 56,480 52,950 14,120 $ 54,320 62,080 7,760 % % % % % % % % % Previous year Amount Previous year Percent $353,000 100 ✓ % 208,270 $ 56,480 52,950 14,120 % % % % % % % %
Revenue and expense data for Bluestem Company are as follows: Administrative expenses Cost of goods sold Income tax expense Sales Selling expenses Year 2 $37,000 350,000 40,000 800,000 150,000 Year 1 a. Prepare a comparative income statement, with vertical analysis, stating each item for both years as a percent of sales. Round percents to one decimal point. Bluestem Company Total operating expenses $ $ There was Comparative Income Statement For Years Ended December 31, Year 2 and Year 1 $20,000 320,000 32,000 700,000 110,000 Year 2 Year 2 Amount Percent 11% % Year 1 Year 1 Amount Percent %%$ % $ %$ % % % % % % % b. Comment upon significant changes disclosed by the comparative income statement. in the cost of goods sold, and in cost of goods sold and contributed greatly to the in administrative expenses. However, the more significant in net income. in selling expenses offset the
With the given statement of comprehensive income below, conduct a vertical analysis.
Express the following comparative income statements in common-size percents. Using the common-size percents, which item is most responsible for the decline in net income? Complete this question by entering your answers in the tabs below. Income Statement Reason for Decline in Net Income Express the following comparative income statements in common-size percents. (Round your percentage answers to 1 decimal place.) Sales Cost of goods sold Gross profit Operating expenses Net income GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Year $ Current Year % 720,000 $ 568,100 151,900 128,000 23,900 $ Prior Year $ $ $ 625,000 291,000 334,000 252,800 81,200 Prior Year %
Assume Martinez Company has the following reported amounts: Sales revenue $ 610,000, Sales returns and allowances $ 30,000, Cost of goods sold $ 396,500, and Operating expenses $ 84,000. (a) Compute net sales. Net sales (b) Compute gross profit. Gross profit (c) Compute income from operations. Income from operations (d) Compute the gross profit rate. (Round answer to 1 decimal place, e.g. 25.2%.) Gross profit rate %24
Saved Express the following comparative income statements in common-size percents. Using the common-size percentages, which item is most responsible for the decline in net income? Income Statement Reason for Decline in Net Income Express the following comparative income statements in common-size percents. (Round your percentage answers to 1 decimal place.) GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Year Prior Year %24 % Sales $ 740,000 $ 655,000 Cost of goods sold 570,800 282,200 Gross profit 169.200 Operating expenses Net income 372,800 258,800 $ 114,000 129,200 40,000 ere to search a f6 24 4 & L. 8. E T Y
Vertical Analysis of Income Statement Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Current Year Previous Year Sales $457,000 $407,000 Cost of goods sold 283,340 231,990 Selling expenses 68,550 69,190 Administrative expenses 77,690 65,120 Income tax expense 9,140 16,280 a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. If required, round percentages to one decimal place. Enter all amounts as positive numbers. Innovation Quarter Inc. Comparative Income Statement For the Years Ended December 31 Current year Amount Current year Percent Previous year Amount Previous year Percent Sales $457,000 % $407,000 % Cost of goods sold 283,340 231,990 % % % Selling expenses 68,550 % 69,190 Administrative expenses 77,690 % 65,120 % % % % % Income tax expense 9,140 % 16,280 % % % b. The vertical analysis indicates that the cost of goods sold as a percent of sales by 5 percentage points, while selling…
b. The vertical analysis indicates that the cost of goods sold as a percent of sales by 8 percentage points, while selling expenses - by 4 percentage points, and administrative expenses by 1 percentage points. Thus, net income as a percent of sales by 3 percentage points.
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Times Interest Earned Sprout Company reported the following on the company's income statement in two recent years: Current Year Prior Year Interest expense $467,000 $560,400 Income before income tax expense 6,911,600 7,733,520 a. Determine the times interest earned ratio for the current year and the prior year. Round to one decimal place. cutent Year Prior Year b. Is the times interest earned ratio improving or declining?