PR 17-2A Vertical analysis of income statement OBJ. 1 For 2014, Kasay Company initiated a sales promotion campaign that included the expenditure of an additional $30,000 for advertising. At the end of the year, Scott Brown, the president, is presented with the following condensed comparative income statement: Kasay Company Comparative Income Statement For the Years Ended December 31, 2014 and 2013 Sales............................................................. Salesreturnsandallowances....................................... Netsales.......................................................... Costofgoodssold................................................. Grossprofit....................................................... Sellingexpenses.................................................. Administrativeexpenses........................................... Totaloperatingexpenses .......................................... Incomefromoperations ........................................... Otherincome..................................................... Incomebeforeincometax ......................................... Incometaxexpense............................................... Netincome....................................................... Instructions 2014 $922,500 22,500 $900,000 360,000 $540,000 $216,000 81,000 $297,000 $243,000 135,000 $378,000 270,000 $108,000 2013 $820,000 20,000 $800,000 340,000 $460,000 $176,000 72,000 $248,000 $212,000 92,000 $304,000 240,000 $ 64,000 Chapter 17 Financial Statement Analysis 823 2. c. Current ratio, 2.0 1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to net sales for each of the years. Round to one decimal place.
PR 17-2A Vertical analysis of income statement OBJ. 1 For 2014, Kasay Company initiated a sales promotion campaign that included the expenditure of an additional $30,000 for advertising. At the end of the year, Scott Brown, the president, is presented with the following condensed comparative income statement:
Kasay Company
Comparative Income Statement
For the Years Ended December 31, 2014 and 2013
Sales............................................................. Salesreturnsandallowances....................................... Netsales.......................................................... Costofgoodssold................................................. Grossprofit....................................................... Sellingexpenses.................................................. Administrativeexpenses........................................... Totaloperatingexpenses .......................................... Incomefromoperations ........................................... Otherincome..................................................... Incomebeforeincometax ......................................... Incometaxexpense............................................... Netincome.......................................................
Instructions
2014
$922,500 22,500 $900,000 360,000 $540,000 $216,000 81,000 $297,000 $243,000 135,000 $378,000 270,000 $108,000
2013
$820,000 20,000 $800,000 340,000 $460,000 $176,000 72,000 $248,000 $212,000 92,000 $304,000 240,000 $ 64,000
Chapter 17 Financial Statement Analysis
823
2. c.
1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to net sales for each of the years. Round to one decimal place.
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