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Income statements for Vernon Company for Year 3 and Year 4 follow: VERNON COMPANY Income Statements Year 4 Year 3 Sales $201,100 $181,100 Cost of goods sold 143,000 121,000 Selling expenses 21,200 19,200 Administrative expenses 12,100 14,100 Interest expense 3,500 5,500 Total expenses 179,800 159,800 Income before taxes 21,300 21,300 Income taxes expense Net income 6,300 3,300 $ 15,000 $ 18,000 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. Complete this question by entering your answers in the tabs below. Required A Required B Perform a vertical analysis, showing each income statement component as a percentage of sales for each year. Note: Percentages may not add exactly due to rounding. Round your answers to 1 decimal place. (i.e., 0.234 should be entered as 23.4). Sales VERNON COMPANY Vertical Analysis of Income Statements Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes Income taxes expense Net income Percentage of Sales Year 4 Percentage of Sales Year 3 % % < Required A Required B >

Income statements for Vernon Company for Year 3 and Year 4 follow: VERNON COMPANY Income Statements Year 4 Year 3 Sales $201,100 $181,100 Cost of goods sold 143,000 121,000 Selling expenses 21,200 19,200 Administrative expenses 12,100 14,100 Interest expense 3,500 5,500 Total expenses 179,800 159,800 Income before taxes 21,300 21,300 Income taxes expense Net income 6,300 3,300 $ 15,000 $ 18,000 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. Complete this question by entering your answers in the tabs below. Required A Required B Perform a vertical analysis, showing each income statement component as a percentage of sales for each year. Note: Percentages may not add exactly due to rounding. Round your answers to 1 decimal place. (i.e., 0.234 should be entered as 23.4). Sales VERNON COMPANY Vertical Analysis of Income Statements Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes Income taxes expense Net income Percentage of Sales Year 4 Percentage of Sales Year 3 % % < Required A Required B >

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 40E: Cuneo Companys income statements for the last 3 years are as follows: Refer to the information for...
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Income statements for Vernon Company for Year 3 and Year 4 follow: VERNON COMPANY Income Statements Year 4 Year 3 Sales $201,100 $181,100 Cost of goods sold 143,000 121,000 Selling expenses 21,200 19,200 Administrative expenses 12,100 14,100 Interest expense 3,500 5,500 Total expenses 179,800 159,800 Income before taxes 21,300 21,300 Income taxes expense Net income 6,300 3,300 $ 15,000 $ 18,000 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. Complete this question by entering your answers in the tabs below. Required A Required B Perform a vertical analysis, showing each income statement component as a percentage of sales for each year. Note: Percentages may not add exactly due to rounding. Round your answers to 1 decimal place. (i.e., 0.234 should be entered as 23.4). Sales VERNON COMPANY Vertical Analysis of Income Statements Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes Income taxes expense Net income Percentage of Sales Year 4 Percentage of Sales Year 3 % % < Required A Required B >
Transcribed Image Text:Income statements for Vernon Company for Year 3 and Year 4 follow: VERNON COMPANY Income Statements Year 4 Year 3 Sales $201,100 $181,100 Cost of goods sold 143,000 121,000 Selling expenses 21,200 19,200 Administrative expenses 12,100 14,100 Interest expense 3,500 5,500 Total expenses 179,800 159,800 Income before taxes 21,300 21,300 Income taxes expense Net income 6,300 3,300 $ 15,000 $ 18,000 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. Complete this question by entering your answers in the tabs below. Required A Required B Perform a vertical analysis, showing each income statement component as a percentage of sales for each year. Note: Percentages may not add exactly due to rounding. Round your answers to 1 decimal place. (i.e., 0.234 should be entered as 23.4). Sales VERNON COMPANY Vertical Analysis of Income Statements Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes Income taxes expense Net income Percentage of Sales Year 4 Percentage of Sales Year 3 % % < Required A Required B >
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