Preparing Income Statements by Using Net Sales as the Base: Vertical Analysis Scherer Company provided the following income statements for its first 3 years of operation: Scherer Company Income Statements Years of Operation Year 1 Year 2 Year 3 Net sales $1,000,000 $1,100,000 $1,300,000 Less: Cost of goods sold (300,000) (315,000) (369,000) Gross margin $700,000 $785,000 $931,000 Less: Operating expenses (431,000) (488,000) (600,500) Income taxes (111,000) (123,000) (135,800) Net income $158,000 $174,000 $194,700 Required: Prepare common-size income statements by using net sales as the base. (Note: Enter all amounts as positive numbers, except for a net loss. Enter net loss as a negative number, if applicable. Round answers to the nearest whole percentage. Percentages may not calculate down.)
Preparing Income Statements by Using Net Sales as the Base: Vertical Analysis Scherer Company provided the following income statements for its first 3 years of operation: Scherer Company Income Statements Years of Operation Year 1 Year 2 Year 3 Net sales $1,000,000 $1,100,000 $1,300,000 Less: Cost of goods sold (300,000) (315,000) (369,000) Gross margin $700,000 $785,000 $931,000 Less: Operating expenses (431,000) (488,000) (600,500) Income taxes (111,000) (123,000) (135,800) Net income $158,000 $174,000 $194,700 Required: Prepare common-size income statements by using net sales as the base. (Note: Enter all amounts as positive numbers, except for a net loss. Enter net loss as a negative number, if applicable. Round answers to the nearest whole percentage. Percentages may not calculate down.)
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...
Related questions
Question
Preparing Income Statements by Using Net Sales as the Base: Vertical Analysis
Scherer Company provided the following income statements for its first 3 years of operation:
| Scherer Company Income Statements Years of Operation |
|||
| Year 1 | Year 2 | Year 3 | |
| Net sales | $1,000,000 | $1,100,000 | $1,300,000 |
| Less: Cost of goods sold | (300,000) | (315,000) | (369,000) |
| Gross margin | $700,000 | $785,000 | $931,000 |
| Less: | |||
| Operating expenses | (431,000) | (488,000) | (600,500) |
| Income taxes | (111,000) | (123,000) | (135,800) |
| Net income | $158,000 | $174,000 | $194,700 |
Required:
Prepare common-size income statements by using net sales as the base. (Note: Enter all amounts as positive numbers, except for a net loss. Enter net loss as a negative number, if applicable. Round answers to the nearest whole percentage. Percentages may not calculate down.)
| Scherer Company | ||||||
| Common-Size Income Statements | ||||||
| Years of Operation | ||||||
| Year 1 | Year 1 | Year 2 | Year 2 | Year 3 | Year 3 | |
| Dollars | Percentage | Dollars | Percentage | Dollars | Percentage | |
| Net sales | $1,000,000 | fill in the blank 1% | 1,100,000 | fill in the blank 2% | $1,300,000 | fill in the blank 3% |
| Less: Cost of goods sold | (300,000) | fill in the blank 4 | (315,000) | fill in the blank 5 | (369,000) | fill in the blank 6 |
| Gross margin | $700,000 | fill in the blank 7 | $785,000 | fill in the blank 8 | $931,000 | fill in the blank 9 |
| Less: | ||||||
| Operating expenses | (431,000) | fill in the blank 10 | (488,000) | fill in the blank 11 | (600,500) | fill in the blank 12 |
| Income taxes | (111,000) | fill in the blank 13 | (123,000) | fill in the blank 14 | (135,800) | fill in the blank 15 |
| Net income | $158,000 | fill in the blank 16% | $174,000 | fill in the blank 17% | $194,700 | fill in the blank 18% |
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 2 steps
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: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning