quarter Inc comparative income tax for the years ended December 31st Sales Cost of goods Selling expenses Administrative expenses Income tax expense $ % $ % $ % $ % $ % $ % $ % $ % B. The vertical analysis indicates tha
quarter Inc comparative income tax for the years ended December 31st Sales Cost of goods Selling expenses Administrative expenses Income tax expense $ % $ % $ % $ % $ % $ % $ % $ % B. The vertical analysis indicates tha
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 1E
Related questions
Question
100%
Vertical analysis income statement Revenue expense data for Innovation quarter Inc for two recent years as follows.
Sales
Cost of goods.
Selling expenses
Administrative expenses
Income tax expense
Current year.
4,000,000
2,280,000
600,000
520,000
240,000
Previous year
3,600,000
1,872,000
648,000
360,000
216,000
A. Prepare an income statement in comparative form, stating to each item for both of years as a percent of sales. Round to the nearest whole percentage.
Innovation quarter Inc comparative income tax for the years ended December 31st
Sales
Cost of goods
Selling expenses
Administrative expenses
Income tax expense
$ % $ %
$ % $ %
$ % $ %
$ % $ %
B. The vertical analysis indicates that the cost of the goods sold as a percent of sales by 5 percentage points, while selling expenses by 3% percentage and administrative expenses by 3% percentage points. Thus net income as a percent of sales by 5 percentage points.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning