Revenue and expense data for Young Technologies Inc. are as follows: Year 2 Year 1 Sales $500,000 $440,000 Cost of goods sold 325,000 242,000 Selling expenses 70,000 79,200 Administrative expenses 75,000 70,400 Income tax expense 10,500 16,400 Required: a. Prepare an income statement in comparative form, stating each item for both years as an amount and as a percent of sales. Round percentage amounts to nearest whole percent. ... b. Complete the following regarding the significant changes disclosed by the comparative income statement. The vertical analysis indicates that the cost of goods sold as a percent of sales (increased/decreased) between the two years. Selling and administrative expenses as a percentage of sales (increased/decreased) and income tax expense (increased/decreased). Overall, net income as a percent of sales (increased/decreased).
Revenue and expense data for Young Technologies Inc. are as follows: Year 2 Year 1 Sales $500,000 $440,000 Cost of goods sold 325,000 242,000 Selling expenses 70,000 79,200 Administrative expenses 75,000 70,400 Income tax expense 10,500 16,400 Required: a. Prepare an income statement in comparative form, stating each item for both years as an amount and as a percent of sales. Round percentage amounts to nearest whole percent. ... b. Complete the following regarding the significant changes disclosed by the comparative income statement. The vertical analysis indicates that the cost of goods sold as a percent of sales (increased/decreased) between the two years. Selling and administrative expenses as a percentage of sales (increased/decreased) and income tax expense (increased/decreased). Overall, net income as a percent of sales (increased/decreased).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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5. Revenue and expense data for Young Technologies Inc. are as follows:
| Year 2 | Year 1 | |||
| Sales | $500,000 | $440,000 | ||
| Cost of goods sold | 325,000 | 242,000 | ||
| Selling expenses | 70,000 | 79,200 | ||
| Administrative expenses | 75,000 | 70,400 | ||
| Income tax expense | 10,500 | 16,400 |
Required:
a. Prepare an income statement in comparative form, stating each item for both years as an amount and as a percent of sales. Round percentage amounts to nearest whole percent.
...
b. Complete the following regarding the significant changes disclosed by the comparative income statement.
The vertical analysis indicates that the cost of goods sold as a percent of sales (increased/decreased) between the two years. Selling and administrative expenses as a percentage of sales (increased/decreased) and income tax expense (increased/decreased). Overall, net income as a percent of sales (increased/decreased).
Transcribed Image Text:a. Prepare an income statement in comparative form, stating each item for both years as an amount and as a percent of sales. Round percentage
amounts to nearest whole percent.
Young Technologies Inc.
Comparative Income Statement
For the Years Ended December 31, Year 2 and Year 1
Year 2 Amount Year 2 Percent
Year 1 Amount Year 1 Percent
%
%
%
%
Total expenses
%
%
%
%
%
%
b. Complete the following regarding the significant changes disclosed by the comparative income statement.
The vertical analysis indicates that the cost of goods sold as a percent of sales
between the two years. Selling and
administrative expenses as a percentage of sales
and income tax expense
Overall, net income as a
percent of sales
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