Chapter 15, Problem 9AT

(a)

To determine

To calculate: The vertical analysis of an income statement for Woof & Meow Pet Supply, for the 3^rd quarter $2015$ if gross sales $\$224,400$, sales returns and allowances is $\$14,300$, merchandise inventory is $July,1$ $\$165,000$, merchandise inventory $\text{September}30$ $\$143,320$, net purchases is $\$76,500$, total operating expenses is $\$68,600$ and income tax is $\$8,790$.

(b)

To determine

To calculate: The horizontal analysis of an income statement for Woof & Meow Pet Supply, for the 4^th quarter $2015$ if gross sales $\$218,200$, sales returns and allowances is $\$9,500$, merchandise inventory is $\text{October},1$ $\$143,320$, merchandise inventory $\text{December}31$ $\$125,300$, net purchases is $\$81,200$, total operating expenses is $\$77,300$ and income tax is $\$11,340$.