College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
22nd Edition
ISBN: 9781305666160
Author: James A. Heintz, Robert W. Parry
Publisher: Cengage Learning
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Chapter 24, Problem 8SPB
To determine
Prepare horizontal analysis of Incorporation JS.
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A. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. Round percentages to one decimal place.
B. What conclusions can be drawn from the horizontal analysis? Round the answers to one decimal place.
=
The current year financial statements for Blue Water Company and Prime Fish Company are presented below.
Prime Fish
Balance sheet
Cash
Accounts receivable (net)
Inventory
Property & equipment (net)
Other assets
Total assets
Current liabilities
Long-term debt (interest rate: 15%)
Capital stock ($10 par value)
Additional paid-in capital
Retained earnings
Total liabilities and stockholders' equity
Income statement
Sales revenue (1/2 on credit)
Cost of goods sold
Operating expenses
Net income
Other data
Per share stock price at end of current year
Blue Water
$ 42,300
44,500
92,500
159,500
85,300
$ 424,100
$ 92,500
74,100
157,100
30,300
70,100
$ 424,100
$ 427,500
(234,500)
(163,600)
$ 29,400
$ 23.3
45%
$ 19,700
34,900
47,800
416,600
318,000
$ 34,300
$ 837,000
$ 68,500
62,600
525,000
107,300
73,600
$ 837,000
$ 789,000
(401,300)
(312,300)
$ 75,400
$28
45%
Average income tax rate
Dividends declared and paid in current year
Both companies are in the fish catching and manufacturing business.…
Prepare a comparative common-size income statement for Jubilee Corporation. To an investor, how does the current year compare with the prior year? Explain your reasoning.
E (Click the icon to view the comparative income statement.)
Data table
Start by calculating the percentages. (Round the percentages to two decimal places, X.XX.)
Jubilee Corporation
Comparative Common-Size Income Statement
A
C
For the Years Ended December 31
1
Jubilee Corporation
Current
2
Income Statement
year
Prior year
3
For the Years Ended December 31
Sales revenues
100.00 %
100.00 %
4
(amounts in thousands)
Less: Cost of goods sold
%
%
Current
Gross profit
%
%
year
Prior year
Less: Operating expenses
%
6 Sales revenues
$
494,208 $
429,000
%
Operating income
%
7 Less: Cost of goods sold
172,640
160,000
Less: Interest expense
8 Gross profit
2$
321,568 $
269,000
0%
Income before income taxes
%
%
9 Less: Operating expenses
143,370
135,000
Less: Income tax expense
10 Operating income
2$
178,198 $
134,000
%
%
11 Less:…
Chapter 24 Solutions
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
Ch. 24 - A comparison of amounts for the same item in the...Ch. 24 - Prob. 2TFCh. 24 - Prob. 3TFCh. 24 - Prob. 4TFCh. 24 - Prob. 5TFCh. 24 - Prob. 1MCCh. 24 - Prob. 2MCCh. 24 - Working capital is a measure of (a) liquidity. (b)...Ch. 24 - Prob. 4MCCh. 24 - Prob. 5MC
Ch. 24 - Prob. 1CECh. 24 - Prob. 2CECh. 24 - Compute the following profitability measures for...Ch. 24 - Prob. 4CECh. 24 - Prob. 5CECh. 24 - Prob. 6CECh. 24 - Prob. 1RQCh. 24 - Prob. 2RQCh. 24 - Prob. 3RQCh. 24 - Prob. 4RQCh. 24 - Prob. 5RQCh. 24 - Prob. 6RQCh. 24 - Prob. 7RQCh. 24 - Prob. 8RQCh. 24 - Prob. 9RQCh. 24 - Prob. 10RQCh. 24 - Prob. 11RQCh. 24 - Prob. 12RQCh. 24 - Prob. 13RQCh. 24 - Prob. 1SEACh. 24 - Prob. 2SEACh. 24 - ANALY SIS OF PROFITABILITY Based on the financial...Ch. 24 - ANALY SIS OF LEVERAGE Based on the financial...Ch. 24 - Prob. 5SEACh. 24 - Prob. 6SEACh. 24 - Prob. 7SEACh. 24 - Prob. 8SPACh. 24 - Prob. 9SPACh. 24 - RATIO ANALYSIS OF COMPARATIVE FINANCIAL STATEMENTS...Ch. 24 - Prob. 1SEBCh. 24 - ANALYSIS OF ACTIVITY MEASURES Based on the...Ch. 24 - Prob. 3SEBCh. 24 - Prob. 4SEBCh. 24 - Prob. 5SEBCh. 24 - Prob. 6SEBCh. 24 - Prob. 7SEBCh. 24 - Prob. 8SPBCh. 24 - Prob. 9SPBCh. 24 - RATIO ANALYSIS OF COMPARATIVE FINANCIAL STATEMENTS...Ch. 24 - Prob. 1MPCh. 24 - This problem challenges you to apply your...
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- Sundahl Companys income statements for the past 2 years are as follows: Refer to the information for Sundahl Company above. Required: Prepare a common-size income statement for Year 2 by expressing each line item for Year 2 as a percentage of that same line item from Year 1. (Note: Round percentages to the nearest tenth of a percent.)arrow_forwardThe following data (in millions) were taken from the financial statements of Costco Wholesale Corporation: a. For Costco, determine the amount of change in millions and the percent of change (round to one decimal place) from the prior year to the recent year for: 1. Revenue 2. Operating expenses 3. Operating income b. Comment on the results of your horizontal analysis in part (a). c. Based upon Exercise 2-23, compare and comment on the operating results of Target and Costco for the recent year.arrow_forwardRevenue and expense data for Gresham Inc. for two recent years are as follows: a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. Round to one decimal place. b. Comment on the significant changes disclosed by the comparative income statement.arrow_forward
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