Vertical Analysis of Income StatementRevenue and expense data for Innovation Quarter Inc. for two recent years are as follows:Current YearPrevious YearSales$457,000$407,000Cost of goods sold283,340231,990Selling expenses68,55069,190Administrative expenses77,69065,120Income tax expense9,14016,280a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. If required, round percentages to one decimal place. Enter all amounts as positive numbers.Innovation Quarter Inc.Comparative Income StatementFor the Years Ended December 31Current year Amount Current year PercentPrevious year Amount Previous year PercentSales$457,000%$407,000%Cost of goods sold283,340231,990%%%Selling expenses68,550%69,190Administrative expenses77,690%65,120%%%%%Income tax expense9,140%16,280%%%b. The vertical analysis indicates that the cost of goods sold as a percent of salesby 5 percentage points, while selling expensesby 2 percentage points, and administrative expensesby 1percentage points. Thus, net income as a percent of salesby 2 percentage points.

Name: Vertical Analysis of Income StatementRevenue and expense data for Inn
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Description: Vertical Analysis of Income StatementRevenue and expense data for Innovation Quarter Inc. for two recent years are as follows:Current YearPrevious YearSales$457,000$407,000Cost of goods sold283,340231,990Selling expenses68,55069,190Administrative ex

Solution : (a). Comparative income statement: Current year amount Current year percent Previous…

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Revenue and expense data for Innovation Quarter Inc. for two recent years are as fo Current Year Previous Year Sales $457,000 $407,000 Cost of goods sold 283,340 231,990 Selling expenses 68,550 69,190 Administrative expenses 77,690 65,120 Income tax expense 9,140 16,280

Revenue and expense data for Innovation Quarter Inc. for two recent years are as fo Current Year Previous Year Sales $457,000 $407,000 Cost of goods sold 283,340 231,990 Selling expenses 68,550 69,190 Administrative expenses 77,690 65,120 Income tax expense 9,140 16,280

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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