Two income statements for Midnight Enterprises are shown below. Midnight Enterprises Income Statements For the Years Ended December 31 Year 2 Year 1 Fees earned $674,350 $520,600 Operating expenses 472,045 338,390 $202,305 $182,210 Operating income a. Prepare a vertical analysis of Midnight Enterprises' income statements. If required, round percentages to the nearest whole number. Do not enter the Midnight Enterprises Income Statements For the Years Ended December 31 Year 2 Amount Year 2 Percent Year 1 Amount Year 1 Percent Fees earned Operating expenses Operating income b. Does the vertical analysis indicate a favorable or unfavorable trend? Depreciation on equipment for the year is $4,560. (a) Record the journal entry if the company prepares adjustments once a year. (b) Record the journal entry if the company prepares adjustments on a monthly basis.
Two income statements for Midnight Enterprises are shown below. Midnight Enterprises Income Statements For the Years Ended December 31 Year 2 Year 1 Fees earned $674,350 $520,600 Operating expenses 472,045 338,390 $202,305 $182,210 Operating income a. Prepare a vertical analysis of Midnight Enterprises' income statements. If required, round percentages to the nearest whole number. Do not enter the Midnight Enterprises Income Statements For the Years Ended December 31 Year 2 Amount Year 2 Percent Year 1 Amount Year 1 Percent Fees earned Operating expenses Operating income b. Does the vertical analysis indicate a favorable or unfavorable trend? Depreciation on equipment for the year is $4,560. (a) Record the journal entry if the company prepares adjustments once a year. (b) Record the journal entry if the company prepares adjustments on a monthly basis.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Can you answer these questions(more than one)
Transcribed Image Text:Two income statements for Midnight Enterprises are shown below.
Midnight Enterprises
Income Statements
For the Years Ended December 31
Year 2
Year 1
Fees earned
$674,350
$520,600
Operating expenses
472,045
338,390
$202,305
$182,210
Operating income
a. Prepare a vertical analysis of Midnight Enterprises' income statements. If required, round percentages to the nearest whole number. Do not enter the
Midnight Enterprises
Income Statements
For the Years Ended December 31
Year 2 Amount Year 2 Percent
Year 1 Amount Year 1 Percent
Fees earned
Operating expenses
Operating income
b. Does the vertical analysis indicate a favorable or unfavorable trend?
Transcribed Image Text:Depreciation on equipment for the year is $4,560.
(a) Record the journal entry if the company prepares adjustments once a year.
(b) Record the journal entry if the company prepares adjustments on a monthly basis.
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