Vertical Analysis of Income StatementRevenue and expense data for Innovation Quarter Inc. for two recent years are as follows:Current YearPrevious YearSales$452,000$393,000Cost of merchandise sold244,080180,780Selling expenses81,36086,460Administrative expenses90,40074,670Income tax expense13,56019,650a. 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 positivenumbers.Innovation Quarter Inc.Comparative Income StatementA For the Years Ended December 31Current year Amount Current year PercentPrevious year Amount Previous year PercentSales$452,000$393,000Cost of merchandise sold244,080%180,780Selling expenses81,36086,460Administrative expenses90,40074,670%624 13,56019,650Income tax expensea. 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 amountsnumbers.Innovation Quarter Inc.Comparative Income StatementFor the Years Ended December 31Current year Amount Current year PercentPrevious year Amount Previous year Percent$452,000$393,000Sales244,080180,780Cost of merchandise sold%Selling expenses81,36086,460%Administrative expenses90,40074,670Income tax expense13,56019,650%b. The vertical analysis indicates that the cost of merchandise sold as a percent of salesI by 8 percentage points, while selling expenses- by 4percentage points, and administrative expensesby 1 percentage points. Thus, net income as a percent of sales- by 3 percentage points.%2400

The income statement is prepared to estimate the net income or loss incurred during the period.

Vertical Analysis Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Current Year Previous Year Sales $452,000 $393,000 Cost of merchandise sold 244,080 180,780 Selling expenses 81,360 86,460 Administrative expenses 90,400 74,670 Income tax eхрense 13,560 19,650 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

Vertical Analysis Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Current Year Previous Year Sales $452,000 $393,000 Cost of merchandise sold 244,080 180,780 Selling expenses 81,360 86,460 Administrative expenses 90,400 74,670 Income tax eхрense 13,560 19,650 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

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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