Survey of Accounting (Accounting I)
8th Edition
ISBN: 9781305961883
Author: Carl Warren
Publisher: Cengage Learning
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Chapter 4, Problem 4.7.1MBA
Gross profit percent and markup percent
Deere & Company (DE) produces and sells tractors, loaders, combines, lawnmowers, and a variety of other equipment. The following data (in millions) were adapted from recent financial statements of Deere.
Compute the gross profit percent for Years 1 and 2. Round to one decimal place.
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b. The vertical analysis indicates that the cost of goods sold as a percent of sales
by 8 percentage points, while selling expenses
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by 1 percentage points. Thus, net income as a percent of
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by 3 percentage points.
Income statement data for Winthrop Company for two recent years ended December 31 are as follows:
Previous Year
Sales
Cost of goods sold
Gross profit
Selling expenses
Administrative expenses
Total operating expenses
Income before income tax expense
Income tax expense
Net income
Line Item Description
Sales
Cost of goods sold
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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. If required, round your answers to one decimal place.
Winthrop Company
Comparative Income Statement
For the Years Ended December 31
Administrative expenses
Total operating expenses
Income before income tax expense
Income tav evnence
$2,240,000
(1,925,000)
$315,000
$(152,500)
(118,000)
$(270,500)
$44,500
(17,800)
$26,700
Current Previous Increase Increase
Year
Year (Decrease) (Decrease)
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Amount
Amount
$2,240,000 $2,000,000
(1,925,000) (1,750,000)
Percent…
a. Prepare a common-sized income statement comparing the results of operations for Dawg Electronics Company with the industry average. If required, round percentages to
one decimal place.
Dawg Electronics Company
Common-Sized Income Statement
Dawg Electronics Dawg Electronics
Electronics Industry
Company Amount Company Percent
Average
Sales
$3,750,000
100.0 %
100.0%
Cost of goods sold
(2,062,500)
550.0 %
(61.0)%
Gross profit
$1,687,500
45.0 %
39.0%
Selling expenses
$(1,125,000)
0.3 %
(23.0)%
Administrative expenses
(262,500)
0.7 %
(10.0)%
Total operating expenses
$(1,387,500)
37.0 %
(33.0)%
Operating income
$300,000
8.0 %
6.0%
Other revenue and expense:
Other revenue
15,000
0.4 %
3.0%
Other expense
(3,750)
0.1 %
(1.0)%
Income before income tax
$311,250
8.3 %
8.0%
Income tax expense
(93,750)
25 %
(2.5)%
Net income
$217,500
5.8 %
5.5%
Chapter 4 Solutions
Survey of Accounting (Accounting I)
Ch. 4 - If merchandise purchased on account is returned,...Ch. 4 - Prob. 2SEQCh. 4 - Prob. 3SEQCh. 4 - On a multiple-step income statement, the excess of...Ch. 4 - As of December 31, 20Y4, Ames Corporation's...Ch. 4 - What distinguishes a retail business from a...Ch. 4 - Prob. 2CDQCh. 4 - Prob. 3CDQCh. 4 - Prob. 4CDQCh. 4 - Prob. 5CDQ
Ch. 4 - When you purchase a new car, the “sticker price”...Ch. 4 - Prob. 7CDQCh. 4 - Differentiate between the multiple and single-step...Ch. 4 - Prob. 9CDQCh. 4 - Can a business earn a gross profit but incur a net...Ch. 4 - Prob. 11CDQCh. 4 - Prob. 12CDQCh. 4 - Determining gross profit During the current year,...Ch. 4 - Determining cost of goods sold For a recent year,...Ch. 4 - Purchase-related transaction Burr Company...Ch. 4 - Purchase-related transactions A retailer Is...Ch. 4 - Prob. 4.5ECh. 4 - Prob. 4.6ECh. 4 - Determining amounts to be paid on invoices...Ch. 4 - Prob. 4.8ECh. 4 - Sales-related transactions After the amount due on...Ch. 4 - Sales-related transactions Merchandise is sold on...Ch. 4 - Prob. 4.11ECh. 4 - Prob. 4.12ECh. 4 - Prob. 4.13ECh. 4 - Prob. 4.14ECh. 4 - Adjustment for merchandise inventory shrinkage...Ch. 4 - Adjustment for Customer Refunds and Returns Assume...Ch. 4 - Prob. 4.17ECh. 4 - Multiple-step income statement On March 31, 20Y5,...Ch. 4 - Single-step income statement Summary operating...Ch. 4 - Multiple-step income statement Identify the enurs...Ch. 4 - Purchase-related transactions The following...Ch. 4 - Sales-related transactions The- following selected...Ch. 4 - Prob. 4.3PCh. 4 - Multiple-step income statement and report form of...Ch. 4 - Multiple-step income statement and report form of...Ch. 4 - Multiple-step income statement and report form of...Ch. 4 - Multiple-step income statement and report form of...Ch. 4 - Single-step income statement Selected accounts and...Ch. 4 - Prob. 4.5.2PCh. 4 - Prob. 4.6.1PCh. 4 - Prob. 4.6.2PCh. 4 - Prob. 4.1MBACh. 4 - Sales transactions Using transactions listed in...Ch. 4 - Prob. 4.3MBACh. 4 - Prob. 4.4MBACh. 4 - Prob. 4.5.1MBACh. 4 - Gross margin percent and markup percent Target...Ch. 4 - Gross margin percent and markup percent Target...Ch. 4 - Prob. 4.6MBACh. 4 - Gross profit percent and markup percent Deere &...Ch. 4 - Prob. 4.7.2MBACh. 4 - Gross profit percent and markup percent Deere &...Ch. 4 - Gross profit percent and markup percent...Ch. 4 - Gross profit percent and markup percent...Ch. 4 - Gross profit percent and markup percent...Ch. 4 - Prob. 4.9MBACh. 4 - Prob. 4.10.1MBACh. 4 - Gross profit percent and markup percent Companies...Ch. 4 - Prob. 4.10.3MBACh. 4 - Prob. 4.1CCh. 4 - Prob. 4.2CCh. 4 - Prob. 4.3.1CCh. 4 - Determining cost of purchase The following is an...Ch. 4 - Prob. 4.4.1CCh. 4 - Prob. 4.4.2CCh. 4 - Prob. 4.4.3CCh. 4 - Prob. 4.5C
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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: 1. Prepare a common-size income statement for Year 1 by expressing each line item as a percentage of sales revenue. (Note: Round percentages to the nearest tenth of a percent.) 2. Prepare a common-size income statement for Year 2 by expressing each line item as a percentage of sales revenue. (Note: Round percentages to the nearest tenth of a percent.)arrow_forwardGross profit percent and markup percent Caterpillar Inc. (CAT) produces and sells various types of equipment. including tractors, loaders, and mining equipment. The following data (in millions) were adapted from recent financial statements of Caterpillar. Compute the gross profit percent for Years 1 and 2. Round to one decimal place.arrow_forwardCuneo Companys income statements for the last 3 years are as follows: Refer to the information for Cuneo Company above. Required: 1. Prepare a common-size income statement for Year 1 by expressing each line item as a percentage of sales revenue. (Note: Round percentages to the nearest tenth of a percent.) 2. Prepare a common-size income statement for Year 2 by expressing each line item as a percentage of sales revenue. (Note: Round percentages to the nearest tenth of a percent.) 3. Prepare a common-size income statement for Year 3 by expressing each line item as a percentage of sales revenue. (Note: Round percentages to the nearest tenth of a percent.)arrow_forward
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