### Income Statements for Walton Company (Year 3 & Year 4)#### WALTON COMPANY**Income Statements:**| Component | Year 4 | Year 3 ||----------------------------|----------|----------|| **Sales** | $200,300 | $180,300 || Cost of goods sold | 143,300 | 121,300 || Selling expenses | 20,000 | 18,900 || Administrative expenses | 12,500 | 14,900 || Interest expense | 2,300 | 5,200 || **Total expenses** | $180,300 | $160,300 || **Income before taxes** | 20,000 | 20,000 || Income taxes expense | 5,600 | 3,300 || **Net income** | $14,400 | $16,700 |### 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.#### Instructions- Complete the analysis by entering your answers in the provided tables.#### Horizontal Analysis Table- The table shows a place for percentage changes in each component from Year 3 to Year 4.- Negative answers should be indicated by a minus sign.- Round percentage answers to 1 decimal place (e.g., 0.234 should be entered as 23.4).| Component | Percentage Change over Year 3 (%) ||----------------------------|-----------------------------------|| Sales | || Cost of goods sold | || Selling expenses | || Administrative expenses | || Interest expense | || Total expenses | || Income before taxes | || Income taxes expense | || Net income (loss) | |Please calculate the percentage changes and enter the values in the appropriate blanks. Income statements for Walton Company for Year 3 and Year 4 follow:**WALTON COMPANY****Income Statements**| Income Statement | Year 4 | Year 3 ||------------------|---------|---------|| Sales | $200,300 | $180,300 || Cost of goods sold | 143,300 | 121,300 || Selling expenses | 20,900 | 18,900 || Administrative expenses | 12,000 | 14,900 || Interest expense | 5,200 | 5,200 || **Total expenses** | $181,400 | $160,300 || **Income before taxes** | 18,900 | 20,000 || Income taxes expense | 4,500 | 3,200 || **Net income** | $14,400 | $16,700 |**Required Tasks:**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.**Instructions for Completing the Task:**Complete this question by entering your answers in the tabs below.- Perform a vertical analysis, showing each income statement component as a percentage of sales for each year. (Percentages may not add exactly due to rounding. Round your percentage answers to 1 decimal place, e.g., 0.234 should be entered as 23.4.)**WALTON COMPANY****Vertical Analysis of Income Statements**| | Percentage of Sales Year 4 | Percentage of Sales Year 3 ||--------------------|-----------------------------|-----------------------------|| Sales | | || Cost of goods sold | | || Selling expenses | | || Administrative expenses | | || Interest expense | | || **Total expenses** | | || **Income before taxes** | | || Income taxes expense | | || **Net income** | | |[Required A] [Required B]---This table provides a structured analysis of Walton Company’s financial performance over two years. The vertical analysis serves to compare each component relative to total sales, offering insights into expense distribution and profitability changes from Year

Comparative financial statements are used to compare two or more years to understand the financial…

Income statements for Walton Company for Year 3 and Year 4 follow: WALTON COMPANY Income Statements. Sales Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes Income taxes expense Net income Required A Required B Year 4 $200, 300 143,300 20,900 12,900 3,200 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. Sales Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes Income taxes expense Net income (loss) $180,300 $160,300 20,000 20,000 3,300 5,600 $ 14,400 $ 16,700 Perform a horizontal analysis, showing the percentage change in each income statement component between Year 3 and Year 4. (Negative answers should be indicated by a minus sign. Round your percentage answers to 1 decimal place. (i.e., 0.234 should be entered as 23.4).) WALTON COMPANY Horizontal Analysis of Income Statements. Year 3 $180,300 121,300 18,900 14,900 5,200 Percentage Change over Year 3 % %

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q