OBJ. 1EX 15-5Horizontal analysis of the income statementIncome statement data for Moreno Company for two recent years ended December 31,are as follows:meCurrent YearPrevious Year$1,120,000$1,000,000Sales875,000$ 125,000971,250Cost of goods soldGross profitSelling expensesAdministrative expenses$ 148,7502$71,25062,50050,00056,000$ 127,250Isso$ 21,500$ 112,500Total operating expensesIncome before income tax12,500000,01228,0005,000Income tax expense13,500%247,50000000Net incomea. Prepare a comparative income statement with horizontal analysis, indicating the in-crease (decrease) for the current year when compared with the previous year. Roundto one decimal place.00000000.0/b.What conclusions can be drawn from the horizontal analysis?

An income statement is the one that is prepared to calculate net income/loss by considering revenue…

OBJ. 1 EX 15-5 Horizontal analysis of the income statement Income statement data for Moreno Company for two recent years ended December 31, are as follows: Current Year Previous Year $1,120,000 $1,000,000 Sales 875,000 $ 125,000 $ 62,500 971,250 Cost of goods sold Gross profit Selling expenses Administrative expenses $ 148,750 $ 71,250 56,000 50,000 $ 127,250 2$ $112,500 Total operating expenses Income before income tax $ 12,500 5,000 %24 21,500 8,000 Income tax expense 24 13,500 7,500 000 Net income a. Prepare a comparative income statement with horizontal analysis, indicating the in- crease (decrease) for the current year when compared with the previous year. Round to one decimal place. b. What conclusions can be drawn from the horizontal analysis?

OBJ. 1 EX 15-5 Horizontal analysis of the income statement Income statement data for Moreno Company for two recent years ended December 31, are as follows: Current Year Previous Year $1,120,000 $1,000,000 Sales 875,000 $ 125,000 $ 62,500 971,250 Cost of goods sold Gross profit Selling expenses Administrative expenses $ 148,750 $ 71,250 56,000 50,000 $ 127,250 2$ $112,500 Total operating expenses Income before income tax $ 12,500 5,000 %24 21,500 8,000 Income tax expense 24 13,500 7,500 000 Net income a. Prepare a comparative income statement with horizontal analysis, indicating the in- crease (decrease) for the current year when compared with the previous year. Round to one decimal place. b. What conclusions can be drawn from the horizontal analysis?

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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Balance Sheet Analysis Complete the balance sheet and sales information in the table that follows for J. White Industries using the following financial data: Total assets turnover: 1.6 Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 30% Total liabilities-to-assets ratio: 35% Quick ratio: 1.20 Days' sales outstanding (based on 365-day year): 36.5 days Inventory turnover ratio: 3.25 Do not round intermediate calculations. Round your answers to the nearest whole dollar. Partial Income Statement Information Sales Cost of goods sold $ 640,000 448,000 Balance Sheet Assets Cash Accounts payable Liabilities and Equity $ 90,000 Accounts receivable 64,000 Long-term debt 50,000 Inventories Common stock Fixed assets Retained earnings 100,000 Total assets $ 400,000 Total liabilities and equity $
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Sales revenue $104,000 $enter a dollar amount Sales returns and allowances enter a dollar amount 4,000 Net sales 98,000 129,000 Cost of goods sold 64,600 enter a dollar amount Gross profit enter a dollar amount 56,760 Operating expenses 20,400 enter a dollar amount Net income enter a dollar amount 21,930 Calculate the profit margin and the gross profit rate for each company. (Round answers to 1 decimal place, e.g. 75.5%.) Crane Company Sheridan Company Profit margin enter profit margin in percentages rounded to 1 decimal place % enter profit margin in percentages rounded to 1 decimal place % Gross profit rate enter gross profit rate in percentages rounded to 1 decimal place % enter gross profit rate in percentages rounded to 1 decimal place %
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Common-size and trend percents for Roxi Company's sales, cost of goods sold, and expenses follow. Current Year Sales Cost of goods sold Operating expenses Common-Size Percents 1 Year Ago 100.0% 63.2 14.2 Trend Percents 2 Years Ago 100.0% 61.0 13.7 Determine the net income for the following years. Did the net income increase, decrease, or remain unchanged in this three-year period? Current Year 100.0% 57.6 14.0 1 Year Years Ago Ago 103.9% 102.7% 108.8 114.0 105.4 100.5 100.0 100.0 100.0