places. Round all other intermediate computations to the nearest whole value. Entthousands.)SalesCost of goods soldGross profitSales commissionsAdvertisingSalariesPayroll taxesEmployee benefitsRentDepreciationSuppliesUtilitiesLegal and accountingMiscellaneousInterest expenseNet income before taxesIncome taxesUDEN SUPPLY COMPANYComparative Income StatementsYears Ended December 20X1, 20X2, and 20X3(Thousands)20X1 Audited 20X2 Audited 20X3 Audited12,7008,7703,93089025012,0008,2803,7208402401,1161951787171373245233425301191,14821018273733934472536059913513,4009,2804,1209402701,180225186757541364927372644145$20X4 Expected14,10010,2623,8389872821,212240190777743385129408689120 Marilyn Terrill is the senior auditor for the audit of Uden Supply Company for the year ended December 31,20X4. In planning the audit, Marilyn is attempting to develop expectations for planning analyticalprocedures based on the financial information for prior years and her knowledge of the business and theindustry, including these:1. Based on economic conditions, she believes that the increase in sales for the current year shouldapproximate the historical trend in terms of actual dollar increases.2. Based on her knowledge of industry trends, she believes that the gross profit percentage for 20X4should be about 2 percent less than the percentage for 20X3.3. Based on her knowledge of regulations, she is aware that the effective tax rate for the company for 20X4has been reduced by 5 percent from that in 20X3.4. Based on her knowledge of economic conditions, she is aware that the effective interest rate on thecompany's line of credit for 20X4 was approximately 12 percent. The average outstanding balance of theline of credit is $3,400,000. This line of credit is the company's only interest-bearing debt.5. Based on her discussions with management and her knowledge of the industry, she believes that theamount of other expenses should be consistent with the trends from prior years.Comparative income statement information for Uden Supply Company is presented in the below table.Required:b. Determine the expected amounts for 20X4 for each of the income statement items. (Round gross profitratio and income taxes ratio to nearest four decimal places. Round other ratios to nearest two decimalplaces. Round all other intermediate computations to the nearest whole value. Enter your answers in

UDEN SUPPLY COMPANY Income Statements Year Ended December 20X4 (Thousands) Particulars Details…

Required: b. Determine the expected amounts for 20X4 for each of the income statement items. (Round gross profit ratio and income taxes ratio to nearest four decimal places. Round other ratios to nearest two decimal places. Round all other intermediate computations to the nearest whole value. Enter your answers in

Required: b. Determine the expected amounts for 20X4 for each of the income statement items. (Round gross profit ratio and income taxes ratio to nearest four decimal places. Round other ratios to nearest two decimal places. Round all other intermediate computations to the nearest whole value. Enter your answers in

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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