The following items were taken from the financial statements of Kramer Manufacturing, Inc., over a three-year period: Item Net Sales Cost of Goods Sold Gross Profit -醉融除 2022 $226,000 150,000 $76.000 2021 $212,000 140,000 $ 72,000 2020 $200,000 125,000 $ 75,000 Instructions Using horizontal analysis and 2020 as the base year, compute the trend percentages for net sales, cost of goods sold, and gross profit. Explain whether the trends are favorable or unfavorable for each item.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Question 2
The following items were taken from the financial statements of Kramer Manufacturing, Inc., over
a three-year period:
Item
Net Sales
Cost of Goods Sold
Gross Profit
2022
$226,000
150.000
$ 76.000
2021
$212,000
140,000
$ 72,000
2020
$200,000
125,000
$ 75,000
Instructions
Using horizontal analysis and 2020 as the base year, compute the trend percentages for net
sales, cost of goods sold, and gross profit. Explain whether the trends are favorable or unfavorable
for each item.
Transcribed Image Text:Question 2 The following items were taken from the financial statements of Kramer Manufacturing, Inc., over a three-year period: Item Net Sales Cost of Goods Sold Gross Profit 2022 $226,000 150.000 $ 76.000 2021 $212,000 140,000 $ 72,000 2020 $200,000 125,000 $ 75,000 Instructions Using horizontal analysis and 2020 as the base year, compute the trend percentages for net sales, cost of goods sold, and gross profit. Explain whether the trends are favorable or unfavorable for each item.
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