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Income statements for Puppy Daycare Company for Year 3 and Year 4 follow: Items Sales Cost of goods sold Selling expenses Administrative expenses Total expenses Income before taxes Income tax expense Net income Year 4 $159,000 73,500 23,650 32,500 129,650 29,350 5,870 $ 23,480 Year 3 $140,600 43,400 26,500 30,600 100,500 40,100 10,025 $ 30,075 Required: a. Perform a horizontal analysis, showing the percentage change in each income statement component between Year and Year b. Perform a vertical analysis, showing each income statement component as a percentage of sales for each year.

Income statements for Puppy Daycare Company for Year 3 and Year 4 follow: Items Sales Cost of goods sold Selling expenses Administrative expenses Total expenses Income before taxes Income tax expense Net income Year 4 $159,000 73,500 23,650 32,500 129,650 29,350 5,870 $ 23,480 Year 3 $140,600 43,400 26,500 30,600 100,500 40,100 10,025 $ 30,075 Required: a. Perform a horizontal analysis, showing the percentage change in each income statement component between Year and Year b. Perform a vertical analysis, showing each income statement component as a percentage of sales for each year.

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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Income statements for Puppy Daycare Company for Year 3 and Year 4 follow: Items Sales Cost of goods sold Selling expenses Administrative expenses Total expenses Income before taxes Income tax expense Net income Required A Required B 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. Sales Cost of goods sold Selling expenses Year 4 $159,000 Complete this question by entering your answers in the tabs below. Administrative expenses Total expenses Income before taxes Income taxes Net income 73,500 23,650 32,500 129,650 29,350 5,870 $ 23,480 Perform a vertical analysis, showing each income statement component as a percentage of sales for each year. Note: Round percentages to 1 decimal place. $ $ Year 3 $140,600 43,400 26,500 30,600 100,500 40,100 10,025 $ 30,075 Puppy Daycare Company Vertical Analysis of Income Statements Year 4 % of Sales 159,000 73,500 23,650 32,500 129,650 29,350 5,870 23,480 < Required A 100.0 0.0 0.0 $ Year 3 Required B > 0 % of Sales 100.0 0.0 0.0
Transcribed Image Text:Income statements for Puppy Daycare Company for Year 3 and Year 4 follow: Items Sales Cost of goods sold Selling expenses Administrative expenses Total expenses Income before taxes Income tax expense Net income Required A Required B 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. Sales Cost of goods sold Selling expenses Year 4 $159,000 Complete this question by entering your answers in the tabs below. Administrative expenses Total expenses Income before taxes Income taxes Net income 73,500 23,650 32,500 129,650 29,350 5,870 $ 23,480 Perform a vertical analysis, showing each income statement component as a percentage of sales for each year. Note: Round percentages to 1 decimal place. $ $ Year 3 $140,600 43,400 26,500 30,600 100,500 40,100 10,025 $ 30,075 Puppy Daycare Company Vertical Analysis of Income Statements Year 4 % of Sales 159,000 73,500 23,650 32,500 129,650 29,350 5,870 23,480 < Required A 100.0 0.0 0.0 $ Year 3 Required B > 0 % of Sales 100.0 0.0 0.0
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