Survey of Accounting (Accounting I)
8th Edition
ISBN: 9781305961883
Author: Carl Warren
Publisher: Cengage Learning
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Chapter 4, Problem 4.8.1MBA
Gross 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.
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Vertical Analysis of Income Statement
Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows:
Previous Year
Sales
Cost of goods sold
Selling expenses
Administrative expenses
Income tax expense
Current Year
$447,000
272,670
71,520
71,520
13,410
$384,000
215,040
69,120
57,600
15,360
Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows:
Current Year
Previous Year
Sales
$488,000
$415,000
Cost of goods sold
312,320
232,400
Selling expenses
68,320
74,700
Administrative expenses
78,080
62,250
Income tax expense
9,760
16,600
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 numbers.
Revenue and expense data for Bluestem Company are as follows:
Administrative expenses
Cost of merchandise sold
Income tax expense
Sales
Selling expenses
Total operating
expenses
Year 2
$37,000
350,000
40,000
800,000
150,000
a. Prepare a comparative income statement, with vertical analysis, stating each item for both years as
a percent of sales. Round percentages to one decimal place.
Bluestem Company
$
Comparative Income Statement
For Years Ended December 31, Year 2 and Year 1
Year 2 Percent
Year 1
$20,000
320,000
32,000
700,000
110,000
Year 2
Amount
The most significant increase in expenses is
resulting in the overall
%
%
%
%
%
%
%
1%
%
$
Year 1
Amount
Year 1 Percent
%
%
%
%
%
%
1%
%
%
b. Complete the following regarding significant changes disclosed by the comparative income
statement.
which offsets the decrease in
of net income.
G
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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- Vertical Analysis of Income Statement Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Current Year Previous Year Sales Cost of merchandise sold Selling expenses Administrative expenses Income tax expense Sales 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 numbers. Innovation Quarter Inc. Comparative Income Statement For the Years Ended December 31 Current year Amount Current year Percent $388,000 100 248,320 Cost of merchandise sold Gross profit Selling expenses Administrative expenses Total operating expenses Income from operations Income tax expense $388,000 248,320 54,320 62,080 7,760 Net income $353,000 208,270 56,480 52,950 14,120 $ 54,320 62,080 7,760 % % % % % % % % % Previous year Amount Previous year Percent $353,000 100 ✓ % 208,270 $ 56,480 52,950 14,120 % % % % % % % %arrow_forwardsarrow_forwardCommon-Sized Income Statement Revenue and expense data for the current calendar year for Sorenson Electronics Company and for the electronics industry are as follows. Sorenson Electronics Company data are expressed in dollars. The electronics industry averages are expressed in percentages. SorensonElectronicsCompany ElectronicsIndustryAverage Sales $1,940,000 100 % Cost of goods sold (1,358,000) (76) Gross profit $582,000 24 % Selling expenses $(329,800) (9) % Administrative expenses (116,400) (9) Total operating expenses $(446,200) (18) % Operating income $135,800 6 % Other revenue and expense: Other revenue 38,800 4 Other expense (19,400) (3) Income before income tax $155,200 7 % Income tax expense (58,200) (5) Net income $97,000 2 % a. Prepare a common-sized income statement comparing the results of operations for Sorenson Electronics Company with the industry average. If…arrow_forward
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