Gibson Corporation reported the following operating results for two consecutive years: Required a. Compute the percentage changes in Gibson Corporation's Income statement components between the two years. Note: Negative amounts should be Indicated by a minus sign. Round your answers to 1 decimal place. (l.e., .234 should be entered as 23.4). Sales Cost of goods sold Gross margin Operating expenses Income before taxes Income taxes Net income (loss) GIBSON CORPORATION Income Statements Year 3 Year 2 $ 1,295,000 $ 1,002,000 796,425 801.200 498,575 400,800 302,500 199,000 196,075 201,800 61,200 52,300 $ 134,875 S 149,500 Percentage Change 96 96
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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