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For 20Y6, Fishing Experiences Inc. initiated a sales promotion campaign that included the expenditure of an additional $13,000 for advertising. At the end of the year, Colt Schultz, the pr presented with the following condensed comparative income statement: FISHING EXPERIENCES INC. Comparative Income Statement For the Years Ended December 31, 20Y6 and 20Y5 20Υ6 20Y5 Sales $458,000 $394,000 Cost of goods sold (210,680) (177,300) Gross profit $ 247,320 $ 216,700 Selling expenses (105,340) (78,800) Administrative expenses (45,800) (51,220) Total operating expenses $ (151,140) $ (130,020) Operating income $ 96,180 $ 86,680 Other revenue 13,740 15,760 Income before income tax $ 109,920 $ 102,440 Income tax expense (45,800) (39,400) Net income $ 64,120 $ 63,040 Instructions: 1. Prepare a comparative income statement for the two-year period, presenting a vertical analysis of each item in relationship to sales for each of the years.

For 20Y6, Fishing Experiences Inc. initiated a sales promotion campaign that included the expenditure of an additional $13,000 for advertising. At the end of the year, Colt Schultz, the pr presented with the following condensed comparative income statement: FISHING EXPERIENCES INC. Comparative Income Statement For the Years Ended December 31, 20Y6 and 20Y5 20Υ6 20Y5 Sales $458,000 $394,000 Cost of goods sold (210,680) (177,300) Gross profit $ 247,320 $ 216,700 Selling expenses (105,340) (78,800) Administrative expenses (45,800) (51,220) Total operating expenses $ (151,140) $ (130,020) Operating income $ 96,180 $ 86,680 Other revenue 13,740 15,760 Income before income tax $ 109,920 $ 102,440 Income tax expense (45,800) (39,400) Net income $ 64,120 $ 63,040 Instructions: 1. Prepare a comparative income statement for the two-year period, presenting a vertical analysis of each item in relationship to sales for each of the years.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Please is this correct ? And what is number 2 as well 

Vertical Analysis for Income Statement For 20Y6, Fishing Experiences Inc. initiated a sales promotion campaign that included the expenditure of an additional $13,000 for advertising. At the end of the year, Colt Schultz, the pr presented with the following condensed comparative income statement: FISHING EXPERIENCES INC. Comparative Income Statement For the Years Ended December 31, 20Y6 and 20Y5 20Y6 20Υ5 Sales $458,000 $394,000 Cost of goods sold (210,680) (177,300) Gross profit $ 247,320 $ 216,700 Selling expenses (105,340) (78,800) Administrative expenses (45,800) (51,220) Total operating expenses $ (151,140) $ (130,020) Operating income $ 96,180 $ 86,680 Other revenue 13,740 15,760 Income before income tax $ 109,920 $ 102,440 Income taxX expense (45,800) (39,400) Net income $ 64,120 $ 63,040 Instructions: 1. Prepare a comparative income statement for the two-year period, presenting a vertical analysis of each item in relationship to sales for each of the years.
Transcribed Image Text:Vertical Analysis for Income Statement For 20Y6, Fishing Experiences Inc. initiated a sales promotion campaign that included the expenditure of an additional $13,000 for advertising. At the end of the year, Colt Schultz, the pr presented with the following condensed comparative income statement: FISHING EXPERIENCES INC. Comparative Income Statement For the Years Ended December 31, 20Y6 and 20Y5 20Y6 20Υ5 Sales $458,000 $394,000 Cost of goods sold (210,680) (177,300) Gross profit $ 247,320 $ 216,700 Selling expenses (105,340) (78,800) Administrative expenses (45,800) (51,220) Total operating expenses $ (151,140) $ (130,020) Operating income $ 96,180 $ 86,680 Other revenue 13,740 15,760 Income before income tax $ 109,920 $ 102,440 Income taxX expense (45,800) (39,400) Net income $ 64,120 $ 63,040 Instructions: 1. Prepare a comparative income statement for the two-year period, presenting a vertical analysis of each item in relationship to sales for each of the years.
Instructions: 1. Prepare a comparative income statement for the two-year period, presenting a vertical analysis of each item in relationship to sales for each of the years. 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| % (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 % 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 % 2. Based on the vertical analysis prepared in 1 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
Transcribed Image Text:Instructions: 1. Prepare a comparative income statement for the two-year period, presenting a vertical analysis of each item in relationship to sales for each of the years. 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| % (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 % 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 % 2. Based on the vertical analysis prepared in 1 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
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