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.

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

Problem 1Q

See similar textbooks

Similar questions

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?
The following data were extracted from the income statement of Brecca Systems Inc.: Current Year Preceding Year Sales $1,533,000 $1,377,915 Beginning inventories 150,275 135,275 Cost of goods sold 876,000 835,100 Ending inventories 124,275 150,275 a. (1). Determine for each year the inventory turnover. Round to one decimal place. Current year fill in the blank 1 Preceding year fill in the blank 2 (2). Determine for each year the number of days' sales in inventory. Assume there are 365 days in the year. Round intermediate calculations to the nearest whole dollar and final answers to one decimal place. Current year fill in the blank 3 days Preceding year fill in the blank 4 days
Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Current Year Previous Year Sales $490,000 $446,000 Cost of merchandise sold 289,100 231,920 Selling expenses 78,400 84,740 Administrative expenses 88,200 75,820 Income tax expense 14,700 22,300 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 $490,000 % $446,000 % Cost of merchandise sold 289,100 % 231,920 % % % Selling expenses 78,400 84,740 % Administrative expenses 88,200 % 75,820 % % % Income tax expense 14,700 % 22,300 % % % b. The vertical analysis indicates that the cost of merchandise sold as a percent of sales - by 7 percentage points, while selling expenses by 3…
If your cost of goods sold for the year was $825,000, with beginning inventory of $240,000 and ending inventory of $260,000, what is the inventory turnover ratio?
The following items were taken from the financial statements of Kramer Manufacturing, Inc., over a 3-year period: Item 2021 2020 2019 Net sales $226,000 $212,000 $200,000 Cost of goods sold 150,000 140,000 125,000 Gross profit $ 76,000 $ 72,000 $ 75,000 Instructions Using horizontal analysis and 2019 as the base year, compute the trend percentages for net sales, cost of goods sold, and gross profit. Item 2021 2020 2019 Net sales % % 100% Cost of goods sold % % 100% Gross profit % % 100% Explain whether the trends are favorable or unfavorable for each…
Concord, Inc. has the following Income Statement (in millions): CONCORD, INC. Income Statement For the Year Ended December 31, 2026 Net Sales $145 Cost of Goods Sold 87 Gross Profit Operating Expenses Net Income 58 O 66.7% 40.0% 100.0% 60.0% 39 $19 Using vertical analysis, what percentage is assigned to gross profit?
Cochran corporation, Inc. has the following income statement: Cochran corporation, Inc. Income statement For the year ended December 31, 2021 net sales $240 Cost of goods sold $150 gross profit $90 Operating expenses $65 Net income $25 Using vertical analysis, what percentage is assigned to operating expenses? a. 27,1% b. 43.3% c. 72.2% d. 260.0%
Following is an incomplete current-year income statement. Determine Net Sales, Cost of goods sold and Net Income. Additional information follows: Return on total assets is 16% (average total assets is $62,500). Inventory turnover is 5 (average inventory is $7,800). Accounts receivable turnover is 8 (average accounts receivable is $7,700). Income Statement Net Sales Cost of goods sold Selling, general, and administrative expenses 8800 Income tax expenses 3800 Net Income
Vertical Analysis of Income Statement Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Previous Year Sales Cost of goods sold Selling expenses Administrative expenses Income tax expense Current Year $447,000 272,670 71,520 71,520 13,410 $384,000 215,040 69,120 57,600 15,360
At the fiscal year ended June 30, 2020, the following information is available for Shein Company: Cost of goods sold. . .$167,400 Sales returns and allowances... 4,000 Sales revenue. 243,200 Interest expense... 5,000 Operating expenses... 88,700 Shein's net income/(net loss) for the period is Select one: a. Net income of $21,900 O b. Net income of $11,900 O c. Net loss of $11,900 O d. Net loss of $21,900
Here are the comparative condensed income statements of Concord Corporation. Concord Corporation Condensed Income Statements For the Years Ended December 31 Net sales Cost of goods sold Gross profit Operating expenses Net income (a) 2022 Net sales $636,000 502,440 133,560 89,040 $44,520 2022 2021 $524,000 Cost of goods sold 502,440 435,444 Prepare a horizontal analysis of the income statement data for Concord Corporation, using 2021 as a base. (Show the amounts of increase or decrease.) (Enter negative amounts and percentages using either a negative sign preceding the number e.g. -45, -45% or parentheses e.g. (45), (45%). Round percentages to 1 decimal place, e.g. 12.3%.) 88,556 49,780 $38,776 2021 CONCORD CORPORATION Condensed Income Statements $636,000 $524,000 435,444 $ Increase or (Decrease) During 2022 Amount Percentage % %
Subject: