Scherer Company provided the following income statements for its first 3 years of operation: Year 1 Year 2 Year 3 Net sales $1,000,000 $1,100,000 $1,300,000 Less: Cost of goods sold Gross margin Less: Operating expenses (300,000) (310,000) (364,000) $ 700,000 $ 936,000 $ 790,000 (484,000) (421,000) (591,000) (111,600) $ 167,400 Income taxes (122,400) $ 183,600 (137,800) $ 207,200 Net income

Scherer Company provided the following income statements for its first 3 years of operation: Year 1 Year 2 Year 3 Net sales $1,000,000 $1,100,000 $1,300,000 Less: Cost of goods sold Gross margin Less: Operating expenses (300,000) (310,000) (364,000) $ 700,000 $ 936,000 $ 790,000 (484,000) (421,000) (591,000) (111,600) $ 167,400 Income taxes (122,400) $ 183,600 (137,800) $ 207,200 Net income

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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Compute common-size percents for the following comparative income statements (round percents to one decimal). Using the common-size percents, which item is most responsible for the decline in net income?
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Current assets: Cash Accounts receivable Merchandise inventory Prepaid expenses Total current assets Plant and equipment: Building (net) Land T Total assets Total plant and equipment Assets Total assets Liabilities Current liabilities: Accounts payable Salaries payable Total current liabilities Long-term liabilities: Mortgage note payable despaces Stockholders' Equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ $ $ $ Show Transcribed Text S $ LOGIC COMPANY Comparative Balance Sheet December 31, 2019 and 2020 2020 $ $ $ $ $ $ Amount www. 93,200 13,700 7,700 21,400 22,700 44,100 12,700 17,200 9,200 21,700 27,400 49,100 93,200 24,700 63.800 15,200 14,200 29,400 93,200 Percent. $ $ $ $ S $ $ $ $ $ $ $ ---- 69,900 7,700 5,700 13,400 21,200 34,600 21,700 13,600 35,300 69,900 Amount 2019 9,700 13,200 14,700 10,700 48.300 11,900 9,700 21,600 69,900 Percent
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