Question 2: The income statement for Sutherland Inc., appears below. Net sales Cost of goods sold Gross profit Operating Expenses Operating income Other income (expense) Income before tax Income tax expense Net income Income Statements For the years ended December 31 2021 $3,500,000 2,150,000 1,350,000 810,000 540,000 10,000 = + SUTHERLAND INC. 550,000 100,000 $ 450,000 2020 $2,620,000 1,380,000 1,240,000 630,000 610,000 6,000 616,000 140,000 $ 476,000 Increase (Decrease) Amount % Instructions (a) Prepare a horizontal analysis of the statement of financial position data for Sutherland, Inc. using 2020 as a base. Show the amount of increase or decrease as well. (b) Prepare a vertical analysis as well, using net sales as the base. Give your observations about the changes that have occurred for Sutherland, Inc. between 2020 and 2021.

Question 2: The income statement for Sutherland Inc., appears below. Net sales Cost of goods sold Gross profit Operating Expenses Operating income Other income (expense) Income before tax Income tax expense Net income Income Statements For the years ended December 31 2021 $3,500,000 2,150,000 1,350,000 810,000 540,000 10,000 = + SUTHERLAND INC. 550,000 100,000 $ 450,000 2020 $2,620,000 1,380,000 1,240,000 630,000 610,000 6,000 616,000 140,000 $ 476,000 Increase (Decrease) Amount % Instructions (a) Prepare a horizontal analysis of the statement of financial position data for Sutherland, Inc. using 2020 as a base. Show the amount of increase or decrease as well. (b) Prepare a vertical analysis as well, using net sales as the base. Give your observations about the changes that have occurred for Sutherland, Inc. between 2020 and 2021.

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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