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 statement: 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 goods sold (510,000) (475,000) Gross profit $ 990,000 $ 775,000 Selling expenses $ (270,000) $ (200,000) Administrative expenses (180,000) (156,250) Total operating expenses $ (450,000) $ (356,250) Operating income $ 540,000 $ 418,750 Other revenue 60,000 50,000 Income before income tax expense $ 600,000 $ 468,750 Income tax expense (450,000) (375,000) Net income $ 150,000 $ 93,750 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. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Tri-Comic Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y2 20Y1 20Y1 Amount Percent Amount Percent Sales Cost of goods sold = Gross profit Selling expenses Administrative expenses Total operating expenses Operating income Other revenue Income before income tax expense Income tax expense Net income
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 statement: 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 goods sold (510,000) (475,000) Gross profit $ 990,000 $ 775,000 Selling expenses $ (270,000) $ (200,000) Administrative expenses (180,000) (156,250) Total operating expenses $ (450,000) $ (356,250) Operating income $ 540,000 $ 418,750 Other revenue 60,000 50,000 Income before income tax expense $ 600,000 $ 468,750 Income tax expense (450,000) (375,000) Net income $ 150,000 $ 93,750 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. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Tri-Comic Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y2 20Y1 20Y1 Amount Percent Amount Percent Sales Cost of goods sold = Gross profit Selling expenses Administrative expenses Total operating expenses Operating income Other revenue Income before income tax expense Income tax expense Net income
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 2PA
Related questions
Question
100%
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 statement:
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 goods sold | (510,000) | (475,000) |
Gross profit | $ 990,000 | $ 775,000 |
Selling expenses | $ (270,000) | $ (200,000) |
Administrative expenses | (180,000) | (156,250) |
Total operating expenses | $ (450,000) | $ (356,250) |
Operating income | $ 540,000 | $ 418,750 |
Other revenue | 60,000 | 50,000 |
Income before income tax expense | $ 600,000 | $ 468,750 |
Income tax expense | (450,000) | (375,000) |
Net income | $ 150,000 | $ 93,750 |
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. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Tri-Comic Company | ||||
Comparative Income Statement | ||||
For the Years Ended December 31, 20Y2 and 20Y1 | ||||
20Y2 | 20Y2 | 20Y1 | 20Y1 | |
Amount | Percent | Amount | Percent | |
Sales | ||||
Cost of goods sold | = | |||
Gross profit | ||||
Selling expenses | ||||
Administrative expenses | ||||
Total operating expenses | ||||
Operating income | ||||
Other revenue | ||||
Income before income tax expense | ||||
Income tax expense | ||||
Net income |
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 with 1 images
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
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
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
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
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
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning