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ss the ratio c fraction car SS would be th

ss the ratio c fraction car SS would be th

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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Below are the Income Statement of ABC Company for two consecutive years. ABC Company Year 1 P 5,000, 000 Year 2 P 6, 500, 000 950, 000 600, 000 Net Sales Cost of Goods Soldxs3 Gross Profit 880, 000 550, 000 Less: Administrative Expense Selling and Operating 20,000 Expense Income before taxes Income Tax Expense Income After Taxes 95,000 105, 000 40, 000 4,805, 000 3, 455, 000 691, 000 P 2, 764, 000 961, 000 P 3,844, 000 Find the following: a, Express the ratio of the Gross Profit of Year 1 to the Cost of Goods Sold of Ycar 2 in Fraction. b. What fraction can you arrive at if you compare the Administrative Expenses of Year 1 to its Year 2? c. What would be the difference if you subtract your answer from letter a to your answer from letter b? d. What fraction can you arrive if you will compare the Selling and Operating taxes of Year 2 to the Net Sales of Year 1? e. Express the ratio of Year 1 Selling and Operating Expense to the Administrative Expense of the same year in fraction form. f. What would be the product of the answers for letters d and e? RV
Transcribed Image Text:Below are the Income Statement of ABC Company for two consecutive years. ABC Company Year 1 P 5,000, 000 Year 2 P 6, 500, 000 950, 000 600, 000 Net Sales Cost of Goods Soldxs3 Gross Profit 880, 000 550, 000 Less: Administrative Expense Selling and Operating 20,000 Expense Income before taxes Income Tax Expense Income After Taxes 95,000 105, 000 40, 000 4,805, 000 3, 455, 000 691, 000 P 2, 764, 000 961, 000 P 3,844, 000 Find the following: a, Express the ratio of the Gross Profit of Year 1 to the Cost of Goods Sold of Ycar 2 in Fraction. b. What fraction can you arrive at if you compare the Administrative Expenses of Year 1 to its Year 2? c. What would be the difference if you subtract your answer from letter a to your answer from letter b? d. What fraction can you arrive if you will compare the Selling and Operating taxes of Year 2 to the Net Sales of Year 1? e. Express the ratio of Year 1 Selling and Operating Expense to the Administrative Expense of the same year in fraction form. f. What would be the product of the answers for letters d and e? RV
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