Income statement data for Boone Company for two recent years ended December 31, are as follows: Previous Year Horizontal Analysis of the Income Statement Current Year $800,000 $640,000 Sales 664,200 540,000 Cost of goods sold $135,800 $100,000 Gross profit $39,100 $34,000 Selling expenses 35,670 29,000 Administrative expenses $74,770 $63,000 Total operating expenses Income before income tax $61,030 $37,000 Income tax expenses 24,400 14,800 Net income $36,630 $22,200 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 to one decimal place. Boone Company Comparative Income Statement For the Years Ended December 31 Current year Previous year Increase (Decrease) Increase (Decrease) Amount Amount Amount Percent Sales $800,000 $640,000 Cost of goods sold 664,200 540,000 Gross profit $135,800 $100,000 Selling expenses 39,100 34,000 Administrative 35,670 29,000 expenses Total operating $74,770 $63,000 expenses Income before income $61,030 $37,000 2$ tax Income tax expense 24,400 14,800 Net income $36,630 $22,200 %24 %24

Income statement data for Boone Company for two recent years ended December 31, are as follows: Previous Year Horizontal Analysis of the Income Statement Current Year $800,000 $640,000 Sales 664,200 540,000 Cost of goods sold $135,800 $100,000 Gross profit $39,100 $34,000 Selling expenses 35,670 29,000 Administrative expenses $74,770 $63,000 Total operating expenses Income before income tax $61,030 $37,000 Income tax expenses 24,400 14,800 Net income $36,630 $22,200 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 to one decimal place. Boone Company Comparative Income Statement For the Years Ended December 31 Current year Previous year Increase (Decrease) Increase (Decrease) Amount Amount Amount Percent Sales $800,000 $640,000 Cost of goods sold 664,200 540,000 Gross profit $135,800 $100,000 Selling expenses 39,100 34,000 Administrative 35,670 29,000 expenses Total operating $74,770 $63,000 expenses Income before income $61,030 $37,000 2$ tax Income tax expense 24,400 14,800 Net income $36,630 $22,200 %24 %24

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 40E: Cuneo Companys income statements for the last 3 years are as follows: Refer to the information for...

See similar textbooks

Similar questions

On January 1, Pope Enterprises inventory was 625,000. Pope made 950,000 of net purchases during the year. On its year-end income statement, Pope reported cost of goods sold of 1,025,000. Calculate Popes December 31 ending inventory.
Cost of goods sold and related items The following data were extracted from the accounting records of Harkins Company for the year ended April 30, 20Y8: Estimated returns of current year sales 11,600 Inventory, May 1, 20Y7 380,000 Inventory, April 30, 20Y8 415,000 Purchases 3,800,000 Purchases returns and allowances 150,000 Purchases discounts 80,000 Sales 5,850,000 Freight in 16,600 a. Prepare the Cost of goods sold section of the income statement for the year ended April 30, 20Y8, using the periodic inventory system. b. Determine the gross profit to be reported on the income statement for the year ended April 30, 20Y8. c. Would gross profit be different if the perpetual inventory system was used instead of the periodic inventory system?
The following information is available for Cooke Company for the current year: The gross margin is 40% of net sales. What is the cost of goods available for sale? a. 5840,000 b. 960,000 c. 1,200,000 d. 1,220,000
Last year, Nikkola Company had net sales of 2,299,500,000 and cost of goods sold of 1,755,000,000. Nikkola had the following balances: Refer to the information for Nikkola Company above. Required: Note: Round answers to one decimal place. 1. Calculate the average inventory. 2. Calculate the inventory turnover ratio. 3. Calculate the inventory turnover in days. 4. CONCEPTUAL CONNECTION Based on these ratios, does Nikkola appear to be performing well or poorly?
Juroe Company provided the following income statement for last year: Juroes balance sheet as of December 31 last year showed total liabilities of 10,250,000, total equity of 6,150,000, and total assets of 16,400,000. Required: 1. Calculate the return on sales. (Note: Round the percent to two decimal places.) 2. CONCEPTUAL CONNECTION Briefly explain the meaning of the return on sales ratio, and comment on whether Juroes return on sales ratio appears appropriate.
Cuneo 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.)