Tri-Comic Company Comparative Income Statement For the Years Ended December 31, 2012 and 20Y1 Sales Cost of merchandise sold Gross profit Selling expenses Administrative expenses Total operating expenses Income from operations Other revenue Income before income tax expense Income tax expense Net income Required: 2012 20Y1 $705,000 $606,000 324,300 315,120 $380,700 $290,880 $133,950 $109,080 70,500 72,720 $204,450 $181,800 $176,250 $109,080 35,250 36,360 $211,500 $145,440 84,600 60,600 $126,900 $84,840 1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to sales for each of the years. Enter percentages as whole numbers. Enter all amounts as positive numbers. Tri-Comic Company Sales Cost of merchandise sold Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 2012 2012 20Y1 20Y1 Amount Percent Amount Percent $705,000 % $606,000 % % 315,120 % $290,880 % 324,300 $380,700 $133,950 70,500 $204,450 $176.250 % % $109,080 72,720 % $181,800 % $109,080 % 36,360 35,250 Gross profit Selling expenses Administrative expenses Total operating expenses Income from operations Other revenue Income before income tax expense $211,500 Income tax expense 84,600 $126,900 Net income 1% $145,440 60,600 $84,840 % 1% % % % % % 1% 1% 2. The vertical analysis indicates that the costs other than selling expenses (cost of merchandise sold and administrative expenses) campaign appears to have been . While selling expenses as a percent of sales slightly, the as a percentage of sales. As a result, net income as a percentage of sales cost was more than made up for by sales. The sales promo
Tri-Comic Company Comparative Income Statement For the Years Ended December 31, 2012 and 20Y1 Sales Cost of merchandise sold Gross profit Selling expenses Administrative expenses Total operating expenses Income from operations Other revenue Income before income tax expense Income tax expense Net income Required: 2012 20Y1 $705,000 $606,000 324,300 315,120 $380,700 $290,880 $133,950 $109,080 70,500 72,720 $204,450 $181,800 $176,250 $109,080 35,250 36,360 $211,500 $145,440 84,600 60,600 $126,900 $84,840 1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to sales for each of the years. Enter percentages as whole numbers. Enter all amounts as positive numbers. Tri-Comic Company Sales Cost of merchandise sold Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 2012 2012 20Y1 20Y1 Amount Percent Amount Percent $705,000 % $606,000 % % 315,120 % $290,880 % 324,300 $380,700 $133,950 70,500 $204,450 $176.250 % % $109,080 72,720 % $181,800 % $109,080 % 36,360 35,250 Gross profit Selling expenses Administrative expenses Total operating expenses Income from operations Other revenue Income before income tax expense $211,500 Income tax expense 84,600 $126,900 Net income 1% $145,440 60,600 $84,840 % 1% % % % % % 1% 1% 2. The vertical analysis indicates that the costs other than selling expenses (cost of merchandise sold and administrative expenses) campaign appears to have been . While selling expenses as a percent of sales slightly, the as a percentage of sales. As a result, net income as a percentage of sales cost was more than made up for by sales. The sales promo
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:For 2012, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $20,000 for advertising. At the end of the year, Lumi Neer, the president, is presented with the following condensed comparative income statement:
Tri-Comic Company
Comparative Income Statement
For the Years Ended December 31, 20Y2 and
Sales
Cost of merchandise sold
Gross profit
Selling expenses
Administrative expenses
Total operating expenses
Income from operations
Other revenue
Income before income tax
expense
Income tax expense
Net income
20Y1
Required:
20Y2 20Y1
$705,000 $606,000
324,300 315,120
$380,700 $290,880
$133,950 $109,080
70,500 72,720
$204,450 $181,800
$176,250 $109,080
35,250 36,360
$211,500 $145,440
Sales
Cost of merchandise sold
84,600 60,600
$126,900 $84,840
1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to sales for each of the years. Enter percentages as whole numbers. Enter all amounts as positive numbers.
Tri-Comic Company
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
%
Gross profit
20Y2 20Y2 20Y1 20Y1
Amount Percent Amount Percent
$705,000
% $606,000
%
324,300 % 315,120
$380,700
% $290,880
$133,950 % $109,080
70,500
%
72,720
$204,450 % $181,800
$176,250
% $109,080
%
35,250
36,360
Income before income tax expense $211,500
% $145,440
Income tax expense
84,600
% 60,600
$126,900
$84,840
Selling expenses
Administrative expenses
Total operating expenses
Income from operations
Other revenue
Net income
%
%
%
%
%
%
%
%
%
%
2. The vertical analysis indicates that the costs other than selling expenses (cost of merchandise sold and administrative expenses)
campaign appears to have been
. While selling expenses as a percent of sales
slightly, the
as a percentage of sales. As a result, net income as a percentage of sales
cost was more than made up for by
sales.
The sales promotion
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