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Tri-Comic Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales.. $1,500,000 $1,250,000 Cost of merchandise sold.. Gross profit... Selling expenses...... Administrative expenses.. 510,000 $ 990,000 $ 270,000 180,000 $ 450,000 $ 540,000 60,000 475,000 $ 775,000 $ 200,000 156,250 $ 356,250 $ 418,750 50,000 $ 468,750 375,000 $ 9,750 ........ ***. Total operating expenses... Income from operations... .... Other revenue... ... Income before income tax expense....... Income tax expense..... * $ 600,000 450,000 $ 150,000 Net income... Instructions 1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to sales for each of the years. Round percentages to one decimal place. 2. To the extent the data permit, comment on the significant relationships revealed by the vertical analysis prepared in (1).

Tri-Comic Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales.. $1,500,000 $1,250,000 Cost of merchandise sold.. Gross profit... Selling expenses...... Administrative expenses.. 510,000 $ 990,000 $ 270,000 180,000 $ 450,000 $ 540,000 60,000 475,000 $ 775,000 $ 200,000 156,250 $ 356,250 $ 418,750 50,000 $ 468,750 375,000 $ 9,750 ........ ***. Total operating expenses... Income from operations... .... Other revenue... ... Income before income tax expense....... Income tax expense..... * $ 600,000 450,000 $ 150,000 Net income... Instructions 1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to sales for each of the years. Round percentages to one decimal place. 2. To the extent the data permit, comment on the significant relationships revealed by the vertical analysis prepared in (1).

Accounting (Text Only)
Accounting (Text Only)
26th Edition
ISBN:9781285743615
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter17: Financial Statement Analysis
Section: Chapter Questions
Problem 17.1EX
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PR 17-2A Vertical analysis of income statement For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $50,000 for advertising. At the end of the year, Lumi Neer, the president, is presented with the following condensed comparative income OBJ. 2 statement: (Continued)
Transcribed Image Text:PR 17-2A Vertical analysis of income statement For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $50,000 for advertising. At the end of the year, Lumi Neer, the president, is presented with the following condensed comparative income OBJ. 2 statement: (Continued)
Tri-Comic Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Υ1 Sales.. $1,500,000 $1,250,000 510,000 $ 990,000 S 270,000 Cost of merchandise sold.. 475,000 $ 775,000 $ 200,000 156,250 $ 356,250 $ 418,750 Gross profit.. Selling expenses.. Administrative expenses... Total operating expenses. Income from operations.. 180,000 $ 450,000 $ 540,000 Other revenue.... Income before income tax expense. 60,000 50,000 $ 468,750 375,000 $ 93,750 $ 600,000 Income tax expense... 450,000 Net income... $ 150,000 Instructions 1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to sales for each of the years. Round percentages to one decimal place. 2. To the extent the data permit, comment on the significant relationships revealed by the vertical analysis prepared in (1).
Transcribed Image Text:Tri-Comic Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Υ1 Sales.. $1,500,000 $1,250,000 510,000 $ 990,000 S 270,000 Cost of merchandise sold.. 475,000 $ 775,000 $ 200,000 156,250 $ 356,250 $ 418,750 Gross profit.. Selling expenses.. Administrative expenses... Total operating expenses. Income from operations.. 180,000 $ 450,000 $ 540,000 Other revenue.... Income before income tax expense. 60,000 50,000 $ 468,750 375,000 $ 93,750 $ 600,000 Income tax expense... 450,000 Net income... $ 150,000 Instructions 1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to sales for each of the years. Round percentages to one decimal place. 2. To the extent the data permit, comment on the significant relationships revealed by the vertical analysis prepared in (1).
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