Exercise 13-3A (Algo) Horizontal and vertical analysis LO 13-1 Income statements for Vernon Company for Year 3 and Year 4 follow: VERNON COMPANY Income Statements Year 4 Year 3 Sales $201,300 $181,300 Cost of goods sold 143,700 121,700 Selling expenses 21,000 19,000 Administrative expenses 12,200 14,200 Interest expense 3,700 5,700 Total expenses 180,600 160,600 Income before taxes 20,700 20,700 Income taxes expense Net income 5,400 3,900 $ 15,300 $ 16,800 Required a. Perform a horizontal analysis, showing the percentage change in each income statement component between Year 3 and Year 4. b. Perform a vertical analysis, showing each income statement component as a percentage of sales for each year.

Exercise 13-3A (Algo) Horizontal and vertical analysis LO 13-1 Income statements for Vernon Company for Year 3 and Year 4 follow: VERNON COMPANY Income Statements Year 4 Year 3 Sales $201,300 $181,300 Cost of goods sold 143,700 121,700 Selling expenses 21,000 19,000 Administrative expenses 12,200 14,200 Interest expense 3,700 5,700 Total expenses 180,600 160,600 Income before taxes 20,700 20,700 Income taxes expense Net income 5,400 3,900 $ 15,300 $ 16,800 Required a. Perform a horizontal analysis, showing the percentage change in each income statement component between Year 3 and Year 4. b. Perform a vertical analysis, showing each income statement component as a percentage of sales for each year.

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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