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Fishing Experiences Inc. Comparative Income Statement For the Years Ended December 31, 20Y6 and 20Y5 20Y6 Amount 20Y6 Percent 20Y5 Amount 20Y5 Percent Sales $458,000 100 V % $394,000 100 Cost of goods sold (210,680) -46 v % (177,300) -45 Gross profit $247,320 54 V % $216,700 55 Selling expenses $(105,340) -23 $(78,800) -20 Administrative expenses (45,800) -10 (51,220) -13 Total operating expenses $(151,140) -33 $(130,020) -33 Operating income $96,180 21 v % $86,680 22 % Other revenue 13,740 3 V % 15,760 4 Income before income tax $109,920 24 v % $102,440 26 % Income tax expense (45,800) -10 (39,400) -10 Net income $64,120 14 % $63,040 16 %

Fishing Experiences Inc. Comparative Income Statement For the Years Ended December 31, 20Y6 and 20Y5 20Y6 Amount 20Y6 Percent 20Y5 Amount 20Y5 Percent Sales $458,000 100 V % $394,000 100 Cost of goods sold (210,680) -46 v % (177,300) -45 Gross profit $247,320 54 V % $216,700 55 Selling expenses $(105,340) -23 $(78,800) -20 Administrative expenses (45,800) -10 (51,220) -13 Total operating expenses $(151,140) -33 $(130,020) -33 Operating income $96,180 21 v % $86,680 22 % Other revenue 13,740 3 V % 15,760 4 Income before income tax $109,920 24 v % $102,440 26 % Income tax expense (45,800) -10 (39,400) -10 Net income $64,120 14 % $63,040 16 %

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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Based on the vertical analysis attached in the screenshot, which of the following statements is correct?


a. Costs other than selling expenses (cost of goods sold and administrative expenses) improved as a percentage of sales.

b. Net income as a percentage of sales increased.

c. The sales promotion campaign appears to have been successful.

d. Selling expenses as a percent of sales increased slightly

Fishing Experiences Inc. Comparative Income Statement For the Years Ended December 31, 20Y6 and 20Y5 20Y6 Amount 20Y6 Percent 20Y5 Amount 20Y5 Percent Sales $458,000 100 % $394,000 100 % Cost of goods sold (210,680) -46 V % (177,300) -45 Gross profit $247,320 54 % $216,700 55 % Selling expenses $(105,340) -23 $(78,800) -20 Administrative expenses (45,800) -10 % (51,220) -13 % Total operating expenses $(151,140) -33 % $(130,020) -33 % Operating income $96,180 21 % $86,680 22 % Other revenue 13,740 3 % 15,760 4 % Income before income tax $109,920 24 % $102,440 26 % Income tax expense (45,800) -10 % (39,400) -10 % Net income $64,120 14 % $63,040 16
Transcribed Image Text:Fishing Experiences Inc. Comparative Income Statement For the Years Ended December 31, 20Y6 and 20Y5 20Y6 Amount 20Y6 Percent 20Y5 Amount 20Y5 Percent Sales $458,000 100 % $394,000 100 % Cost of goods sold (210,680) -46 V % (177,300) -45 Gross profit $247,320 54 % $216,700 55 % Selling expenses $(105,340) -23 $(78,800) -20 Administrative expenses (45,800) -10 % (51,220) -13 % Total operating expenses $(151,140) -33 % $(130,020) -33 % Operating income $96,180 21 % $86,680 22 % Other revenue 13,740 3 % 15,760 4 % Income before income tax $109,920 24 % $102,440 26 % Income tax expense (45,800) -10 % (39,400) -10 % Net income $64,120 14 % $63,040 16
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