FINANCIAL ACCOUNTING W/ACCESS >CI<
2nd Edition
ISBN: 9781259999024
Author: SPICELAND
Publisher: MCG CUSTOM
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Textbook Question
Chapter 12, Problem 12.1BP
Game-On Sports operates in two distinct segments: athletic equipment and accessories. The income statement for each operating segment is presented below.
Perform vertical analysis (LO12–1)
| GAME-ON SPORTS Income Statement For the year ended December 31, 2018 |
||||
| Athletic Equipment | Accessories | |||
| Amount | % | Amount | % | |
| Net sales | $3,050,000 | $3,500,000 | ||
| Cost of goods sold | 1,350,000 | 1,670,000 | ||
| Gross profit | 1,700,000 | 1,830,000 | ||
| Operating expenses | 750,000 | 800,000 | ||
| Operating income | 950,000 | 1,030,000 | ||
| Other income (expense) | 80,000 | (15,000) | ||
| Income before tax | 1,030,000 | 1,015,000 | ||
| Income tax expense | 235,000 | 210,000 | ||
| Net income | $ 795,000 | $ 805,000 | ||
Required:
1. Complete the “%” columns to be used in a vertical analyst of Game-On Sports’ two operating segments. Express each amount as a percentage of sales.
2. Use vertical analysis to compare the profitability of the two operating segments. Which segment is more profitable?
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Game-On Sports operates in two distinct segments: athletic equipment and accessories. The income statement for each operating segment is presented below.
GAME-ON SPORTSIncome StatementFor the year ended December 31, 2021
Athletic Equipment
Accessories
Amount
%
Amount
%
Net sales
Cost of goods sold
Gross profit
Operating expenses
Operating income
Other income (expense)
Income before tax
Income tax expense
Net income
$ 3,050,000
1,350,000
1,700,000
750,000
950,000
80,000
1,030,000
235,000
$ 795,000
$ 3,500,000
1,670,000
1,830,000
800,000
1,030,000
(15,000)
1,015,000
210,000
$ 805,000
Required: 1. Complete the “%” columns to be used in a vertical analysis of Game-On Sports’ two operating segments. Express each amount as a percentage of sales. 2. Use vertical analysis to compare the profitability of the two operating segments. Which segment is more profitable?
Sports Emporium has two operating segments: sporting goods and sports apparel. The income statement for each operating segment is presented below.
SPORTS EMPORIUMIncome StatementFor the year ended December 31, 2021
Sporting Goods
Sports Apparel
Amount %
Amount %
Net sales
Cost of goods sold
Gross profit
Operating expenses
Operating income
Other income (expense)
Income before tax
Income tax expense
Net income
$ 1,800,000
1,040,000
760,000
450,000
310,000
20,000
330,000
80,000
$ 250,000
$ 970,000
440,000
530,000
340,000
190,000
(15,000)
175,000
70,000
$ 105,000
Required:1. Complete the “%” columns to be used in a vertical analysis of Sports Emporium’s two operating segments. Express each amount as a percentage of sales.2. Use vertical analysis to compare the profitability of the two operating segments. Which segment is more profitable?
Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
1
20Y2
20Y1
2
Sales
$10,850,000.00
$10,000,000.00
3
Cost of goods sold
6,000,000.00
5,450,000.00
4
Gross profit
$4,850,000.00
$4,550,000.00
5
Selling expenses
$2,170,000.00
$2,000,000.00
6
Administrative expenses
1,627,500.00
1,500,000.00
7
Total operating expenses
$3,797,500.00
$3,500,000.00
8
Income from operations
$1,052,500.00
$1,050,000.00
9
Other revenue
99,500.00
20,000.00
10
$1,152,000.00
$1,070,000.00
11
Other expense (interest)
132,000.00
120,000.00
12
Income before income tax
$1,020,000.00
$950,000.00
13
Income tax expense
420,000.00
400,000.00
14
Net income
$600,000.00
$550,000.00
Marshall Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1
1
20Y2
20Y1
2
Assets…
Chapter 12 Solutions
FINANCIAL ACCOUNTING W/ACCESS >CI<
Ch. 12 - Prob. 1RQCh. 12 - Prob. 2RQCh. 12 - Prob. 3RQCh. 12 - Prob. 4RQCh. 12 - 5.In performing horizontal analysis, why is it...Ch. 12 - Prob. 6RQCh. 12 - Prob. 7RQCh. 12 - Prob. 8RQCh. 12 - Prob. 9RQCh. 12 - Prob. 10RQ
Ch. 12 - Prob. 11RQCh. 12 - Prob. 12RQCh. 12 - Prob. 13RQCh. 12 - Prob. 14RQCh. 12 - Prob. 15RQCh. 12 - Prob. 16RQCh. 12 - Prob. 17RQCh. 12 - Prob. 18RQCh. 12 - Prob. 19RQCh. 12 - Prob. 20RQCh. 12 - Prob. 12.1BECh. 12 - Prob. 12.2BECh. 12 - Prob. 12.3BECh. 12 - Prob. 12.4BECh. 12 - Prob. 12.5BECh. 12 - Universal Sports Supply began the year with an...Ch. 12 - Prob. 12.7BECh. 12 - Prob. 12.8BECh. 12 - Prob. 12.9BECh. 12 - Prob. 12.10BECh. 12 - Prob. 12.11BECh. 12 - Prob. 12.12BECh. 12 - Prob. 12.13BECh. 12 - Classify each of the following accounting...Ch. 12 - Classify each of the following accepted accounting...Ch. 12 - Prob. 12.1ECh. 12 - Prob. 12.2ECh. 12 - Prob. 12.3ECh. 12 - Prob. 12.4ECh. 12 - Prob. 12.5ECh. 12 - Refer to the information for Adrian Express in...Ch. 12 - Prob. 12.7ECh. 12 - Calculate profitability ratios (LO124) Refer to...Ch. 12 - Prob. 12.9ECh. 12 - The income statement for Stretch-Tape Corporation...Ch. 12 - Prob. 12.11ECh. 12 - LeBrons Bookstores has two divisions, books and...Ch. 12 - Prob. 12.13ECh. 12 - Prob. 12.14ECh. 12 - Distinguish between conservative and aggressive...Ch. 12 - Prob. 12.1APCh. 12 - Prob. 12.2APCh. 12 - Prob. 12.3APCh. 12 - Prob. 12.4APCh. 12 - Prob. 12.5APCh. 12 - Prob. 12.6APCh. 12 - Game-On Sports operates in two distinct segments:...Ch. 12 - Prob. 12.2BPCh. 12 - Prob. 12.3BPCh. 12 - Prob. 12.4BPCh. 12 - Prob. 12.5BPCh. 12 - Prob. 12.6BPCh. 12 - Prob. 12.1APCPCh. 12 - Prob. 12.2APFACh. 12 - Prob. 12.3APFACh. 12 - Prob. 12.4APCACh. 12 - Prob. 12.5APECh. 12 - Prob. 12.7APWCCh. 12 - Prob. 12.8APEM
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