Presented below are the income statements of Dominic Retail Enterprise, a reseller of home decors. • Prepare a common size income statement for both years, 2013 and 2014. Compare the common size statements you have prepared and analyze the key changes that took place.
Presented below are the income statements of Dominic Retail Enterprise, a reseller of home decors. • Prepare a common size income statement for both years, 2013 and 2014. Compare the common size statements you have prepared and analyze the key changes that took place.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Perform both horizontal and vertical analysis for Dominic Retail Enterprise's Comparative Statement.
Transcribed Image Text:10. Presented below are the income statements of Dominic Retail Enterprise, a reseller of home decors.
• Prepare a common size income statement for both years, 2013 and 2014.
Compare the common size statements you have prepared and analyze the key changes that
took place.
Transcribed Image Text:Dominic Retail Enterprise
Income Statements
For the period ended December 31
2014
2013
Sales
P 1,800,000
P 1,500,000
Cost of Goods Sold
Merchandise Inventory, Beginning
80,000
25,000
750,000
Purchases
Total Goods Available for Sale
800,000
880,000
775,000
Merchandise Inventory, Ending
(55,000)
(80,000)
Cost of Goods Sold
825,000
695,000
Gross Profit
975,000
805,000
Operating Expenses
(650,000)
(520,000)
Earnings Before Interest and Taxes
325,000
285,000
Interest Expense
(5,000)
(5,000)
Earnings Before Tax
320,000
280,000
Income Tax Expense
(96,000)
(84,000)
Net Income
P 224,000
P 196,000
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