Income statements for Vernon Company for Year 3 and Year 4 follow. VERNON COMPANY Income Statements Sales Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes. Income taxes expense Net income Year 4 $200,400 143,500 21,200 12,300 4,000 $181,000 19,400 5,100 $14, 300 Year 3 $180,400 121,500 19,200 14,300 6,000 $161,000 19,400 3,100 $16,300 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.
Income statements for Vernon Company for Year 3 and Year 4 follow. VERNON COMPANY Income Statements Sales Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes. Income taxes expense Net income Year 4 $200,400 143,500 21,200 12,300 4,000 $181,000 19,400 5,100 $14, 300 Year 3 $180,400 121,500 19,200 14,300 6,000 $161,000 19,400 3,100 $16,300 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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D3.
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Transcribed Image Text:Income statements for Vernon Company for Year 3 and Year 4 follow.
VERNON COMPANY
Income Statements
Sales
Cost of goods sold
Selling expenses
Administrative expenses
Interest expense
Total expenses
Income before taxes
Income taxes expense
Net income
Year 4
$200,400
143,500
21,200
12,300
4,000
$181,000
19,400
5,100
$14, 300
Year 3
$180,400
121,500
19,200
14,300
6,000
$161,000
19,400
3,100
$16, 300
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.
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