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Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Current Year Previous Year Sales $464,000 $418,000 Cost of goods sold 301,600 250,800 Selling expenses 64,960 66,880 Administrative expenses 69,600 58,520 Income tax expense 9,280 16,720 a. 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 Statement For the Years Ended December 31 Current year Amount Current year Percent Previous year Amount Previous year Percent Sales $464,000 % $418,000 % Cost of goods sold 301,600 % 250,800 % % Selling expenses 64,960 % 66,880 % Administrative expenses 69,600 % 58,520 % $ % $ % % % Income tax expense 9,280 % 16,720 % % The vertical analysis indicates that the cost of goods sold as a percent of sales by 5 percentage points, while selling expenses by 2 percentage points, and administrative expenses by 1 percentage points. Thus, net income as a percent of sales by 2 percentage points.

Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Current Year Previous Year Sales $464,000 $418,000 Cost of goods sold 301,600 250,800 Selling expenses 64,960 66,880 Administrative expenses 69,600 58,520 Income tax expense 9,280 16,720 a. 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 Statement For the Years Ended December 31 Current year Amount Current year Percent Previous year Amount Previous year Percent Sales $464,000 % $418,000 % Cost of goods sold 301,600 % 250,800 % % Selling expenses 64,960 % 66,880 % Administrative expenses 69,600 % 58,520 % $ % $ % % % Income tax expense 9,280 % 16,720 % % The vertical analysis indicates that the cost of goods sold as a percent of sales by 5 percentage points, while selling expenses by 2 percentage points, and administrative expenses by 1 percentage points. Thus, net income as a percent of sales by 2 percentage points.

FINANCIAL ACCOUNTING
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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Vertical analysis

Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Current Year Previous Year Sales $464,000 $418,000 Cost of goods sold 301,600 250,800 Selling expenses 64,960 66,880 Administrative expenses 69,600 58,520 Income tax expense 9,280 16,720 a. 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 Statement For the Years Ended December 31 Current year Amount Current year Percent Previous year Amount Previous year Percent Sales $464,000 % $418,000 % Cost of goods sold 301,600 % 250,800 % % Selling expenses 64,960 % 66,880 % Administrative expenses 69,600 % 58,520 % $ % $ % % % Income tax expense 9,280 % 16,720 % % The vertical analysis indicates that the cost of goods sold as a percent of sales by 5 percentage points, while selling expenses by 2 percentage points, and administrative expenses by 1 percentage points. Thus, net income as a percent of sales by 2 percentage points.
Transcribed Image Text:Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Current Year Previous Year Sales $464,000 $418,000 Cost of goods sold 301,600 250,800 Selling expenses 64,960 66,880 Administrative expenses 69,600 58,520 Income tax expense 9,280 16,720 a. 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 Statement For the Years Ended December 31 Current year Amount Current year Percent Previous year Amount Previous year Percent Sales $464,000 % $418,000 % Cost of goods sold 301,600 % 250,800 % % Selling expenses 64,960 % 66,880 % Administrative expenses 69,600 % 58,520 % $ % $ % % % Income tax expense 9,280 % 16,720 % % The vertical analysis indicates that the cost of goods sold as a percent of sales by 5 percentage points, while selling expenses by 2 percentage points, and administrative expenses by 1 percentage points. Thus, net income as a percent of sales by 2 percentage points.
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