(a) Concept introduction: Horizontal analysis is a way of making a comparison among two years in which one year is taken to be the base year and the comparison is done with the like items and results are given in terms of percentage. To prepare: A statement showing the changes in revenue and expense from 2017 through 2019 using horizontal analysis.

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Answer 1

Question

Chapter 12, Problem 86PSB

To determine

(a)

Concept introduction:

Horizontal analysis is a way of making a comparison among two years in which one year is taken to be the base year and the comparison is done with the like items and results are given in terms of percentage.

To prepare:

A statement showing the changes in revenue and expense from 2017 through 2019 using horizontal analysis.

To determine

(b)

Concept introduction:

Horizontal analysis is a way of making a comparison among two years in which one year is taken to be the base year and the comparison is done with the like items and results are given in terms of percentage.

The primary causes behind increase in net income in 2018 and decrease in net income in 2019.

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Begin by calculating the gross profit for each year, then prepare a horizontal analysis of revenues and gross profitlong dash—both in dollar amounts and in percentageslong dash—for 20192019 and 20182018. (Enter amounts in millions as provided to you in the problem statement. Round the percentages to one decimal place, X.X%. Use a minus sign or parentheses to indicate a decrease.) McDonald Corp. Income Statement - (Partial) Years Ended December 31, 2019 and 2018 (Amounts in millions) 2019 2018 2017 Revenues $9,575 $9,300 $8,975 Cost of Goods Sold 6,250 6,000 5,890 Gross Profit

In the income statement below, ABC Trade Inc. wants to find the resulting net income for the year 2018 (in million). What is the right amount? Income Statement ($ Million) Year End 2015 2016 2017 2018 Sales 1,234.90 1,251.70 1,300.40 1,334.40 Cost of Sales (679.10) (659.00) (681.30) (667.00) Gross Operating Income Selling & Administration (339.70) (348.60) (351.20) (373.30) Depreciation (47.50) (52.00) (55.90) (75.20) Other Income/Expenses 11.80 7.60 7.00 8.20 Earnings Before Interest and Taxes Interest Income 1.30 1.40 1.70 2.00 Interest Expense (16.20) (15.10) (20.50) (23.70) Pre Tax Income Income Taxes (56.80) (64.20) (67.50) (72.60) Net Income Dividends (38.30) (38.70) (39.80) (40.10) Addition to Retained Earnings Group of answer choices 121.8 108.7 132.7 132.8 No choice given

VII. Direction: Compute and interpret. The following comparative financial statements are provided by Avatar Industries. You were asked to compute the different financial ratios and provide your interpretations with regards to profitability, efficiency, liquidity and solvency of the company. Use the Answer Sheet template below to input your answer and solution. AVATAR INDUSTRIES AVATAR INDUSTRIES Comparative Statement of Financial Position For the years 2019 and 2018 Comparative Income Statement For the years 2019 and 2018 2019 2018 2019 2018 ASSETS Current Assets: Sales P200,000 P210,000 Cash & Cash Equivalent P65,000 P70,000 Sales Returns and Allowances 40,000 25,000 Accounts Receivable 40,000 35,000 Net Sales 160,000 185,000 Marketable Secuities 40,000 35,000 Cost of Goods Sold 100,000 115,625 Inventory 100,000 80,000 Gross Profit 60,000 69,375 Total Current Assets 220,000 200,000 160,000 P445,000 P380,000 245,000 Operating Expenses: Fixed Assets Selling Expenses 22,000 25,000 Total…

Answer 2

Question

Chapter 12, Problem 86PSB

To determine

(a)

Concept introduction:

Horizontal analysis is a way of making a comparison among two years in which one year is taken to be the base year and the comparison is done with the like items and results are given in terms of percentage.

To prepare:

A statement showing the changes in revenue and expense from 2017 through 2019 using horizontal analysis.

To determine

(b)

Concept introduction:

Horizontal analysis is a way of making a comparison among two years in which one year is taken to be the base year and the comparison is done with the like items and results are given in terms of percentage.

The primary causes behind increase in net income in 2018 and decrease in net income in 2019.

Expert Solution & Answer

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Answer 3

Question

Chapter 12, Problem 86PSB

To determine

(a)

Concept introduction:

Horizontal analysis is a way of making a comparison among two years in which one year is taken to be the base year and the comparison is done with the like items and results are given in terms of percentage.

To prepare:

A statement showing the changes in revenue and expense from 2017 through 2019 using horizontal analysis.

To determine

(b)

Concept introduction:

Horizontal analysis is a way of making a comparison among two years in which one year is taken to be the base year and the comparison is done with the like items and results are given in terms of percentage.

The primary causes behind increase in net income in 2018 and decrease in net income in 2019.

Expert Solution & Answer

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Answer 4

Question

Chapter 12, Problem 86PSB

To determine

(a)

Concept introduction:

Horizontal analysis is a way of making a comparison among two years in which one year is taken to be the base year and the comparison is done with the like items and results are given in terms of percentage.

To prepare:

A statement showing the changes in revenue and expense from 2017 through 2019 using horizontal analysis.

To determine

(b)

Concept introduction:

Horizontal analysis is a way of making a comparison among two years in which one year is taken to be the base year and the comparison is done with the like items and results are given in terms of percentage.

The primary causes behind increase in net income in 2018 and decrease in net income in 2019.

Expert Solution & Answer

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Answer 5

Chapter 12, Problem 86PSB

To determine

(a)

Concept introduction:

Horizontal analysis is a way of making a comparison among two years in which one year is taken to be the base year and the comparison is done with the like items and results are given in terms of percentage.

To prepare:

A statement showing the changes in revenue and expense from 2017 through 2019 using horizontal analysis.

To determine

(b)

Concept introduction:

Horizontal analysis is a way of making a comparison among two years in which one year is taken to be the base year and the comparison is done with the like items and results are given in terms of percentage.

The primary causes behind increase in net income in 2018 and decrease in net income in 2019.

Answer 6

Chapter 12, Problem 86PSB

To determine

(a)

Concept introduction:

Horizontal analysis is a way of making a comparison among two years in which one year is taken to be the base year and the comparison is done with the like items and results are given in terms of percentage.

To prepare:

A statement showing the changes in revenue and expense from 2017 through 2019 using horizontal analysis.

Answer 7

Chapter 12, Problem 86PSB

To determine

(a)

Concept introduction:

Horizontal analysis is a way of making a comparison among two years in which one year is taken to be the base year and the comparison is done with the like items and results are given in terms of percentage.

To prepare:

A statement showing the changes in revenue and expense from 2017 through 2019 using horizontal analysis.

Answer 8

To determine

(b)

Concept introduction:

Horizontal analysis is a way of making a comparison among two years in which one year is taken to be the base year and the comparison is done with the like items and results are given in terms of percentage.

The primary causes behind increase in net income in 2018 and decrease in net income in 2019.

Answer 9

To determine

(b)

Concept introduction:

Horizontal analysis is a way of making a comparison among two years in which one year is taken to be the base year and the comparison is done with the like items and results are given in terms of percentage.

The primary causes behind increase in net income in 2018 and decrease in net income in 2019.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 12 - Describe how some of the primary groups of users...Ch. 12 - Prob. 2DQ Ch. 12 - Prob. 3DQ Ch. 12 - Prob. 4DQ Ch. 12 - Prob. 5DQ Ch. 12 - Prob. 6DQ Ch. 12 - Prob. 7DQ Ch. 12 - Prob. 8DQ Ch. 12 - Prob. 9DQ Ch. 12 - Prob. 10DQ

Solution Summary: The author explains that horizontal analysis is a way of comparing two years in which one year is taken to be the base year and results are given in terms of percentage.

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Chapter 12 Solutions