Survey of Accounting (Accounting I)
8th Edition
ISBN: 9781305961883
Author: Carl Warren
Publisher: Cengage Learning
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Chapter 4, Problem 4.7.2MBA
To determine
Concept Introduction:
Gross Profit ratio:
Gross profit ratio is calculated by dividing the gross profit by sales. The formula to calculate the gross profit ratio is as follows:
The Markup % for Years 1 and 2
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Revenue and expense data for Young Technologies Inc. are as follows:
Year 2
Year 1
Sales
$500,000
$440,000
Cost of goods sold
325,000
242,000
Selling expense
70,000
79,200
Administrative expenses
75,000
70,400
Income tax expense
10,500
16,400
Required:
a. Prepare an income statement in comparative form, stating each item for both years as an amount and as a percent of sales. Round percentage amounts to nearest whole percent.
Young Technologies Inc.
Comparative Income Statement
For the Years Ended December 31, Year 2 and Year 1
Year 2 Amount
Year 2 Percent
Year 1 Amount
Year 1 Percent
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Revenue and expense data for Young Technologies Inc. are as follows:
Year 2
Year 1
Sales
$500,000
$440,000
Cost of goods sold
325,000
242,000
Selling expense
70,000
79,200
Administrative expenses
75,000
70,400
Income tax expense
10,500
16,400
Required:
a. Prepare an income statement in comparative form, stating each item for both years as an amount and as a percent of sales. Round percentage amounts to nearest whole percent.
Young Technologies Inc.
Comparative Income Statement
For the Years Ended December 31, Year 2 and Year 1
Year 2 Amount
Year 2 Percent
Year 1 Amount
Year 1 Percent
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fill in the blank 0b884b011fe8068_3%
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Comparative Income StatementsConsider the following income statement data from the Ross Company:
Current Year
Previous Year
Sales revenue
$525,000
$450,000
Cost of goods sold
336,000
279,000
Selling expenses
105,000
99,000
Administrative expenses
60,000
54,000
Income tax expense
7,800
5,400
Prepare a comparative income statement, showing increases and decreases in dollars and in percentages.
Note: Round "Percent Change" answers to one decimal place (ex: 0.2345 = 23.5%).
ROSS COMPANYComparative Income Statements
Current Year
Previous Year
Increase(Decrease)
PercentChange
Sales Revenue
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Cost of Goods Sold
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Selling Expenses
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Administrative Expenses
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Total
Answer
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Income before Income Taxes
Answer
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Answer…
Chapter 4 Solutions
Survey of Accounting (Accounting I)
Ch. 4 - If merchandise purchased on account is returned,...Ch. 4 - Prob. 2SEQCh. 4 - Prob. 3SEQCh. 4 - On a multiple-step income statement, the excess of...Ch. 4 - As of December 31, 20Y4, Ames Corporation's...Ch. 4 - What distinguishes a retail business from a...Ch. 4 - Prob. 2CDQCh. 4 - Prob. 3CDQCh. 4 - Prob. 4CDQCh. 4 - Prob. 5CDQ
Ch. 4 - When you purchase a new car, the “sticker price”...Ch. 4 - Prob. 7CDQCh. 4 - Differentiate between the multiple and single-step...Ch. 4 - Prob. 9CDQCh. 4 - Can a business earn a gross profit but incur a net...Ch. 4 - Prob. 11CDQCh. 4 - Prob. 12CDQCh. 4 - Determining gross profit During the current year,...Ch. 4 - Determining cost of goods sold For a recent year,...Ch. 4 - Purchase-related transaction Burr Company...Ch. 4 - Purchase-related transactions A retailer Is...Ch. 4 - Prob. 4.5ECh. 4 - Prob. 4.6ECh. 4 - Determining amounts to be paid on invoices...Ch. 4 - Prob. 4.8ECh. 4 - Sales-related transactions After the amount due on...Ch. 4 - Sales-related transactions Merchandise is sold on...Ch. 4 - Prob. 4.11ECh. 4 - Prob. 4.12ECh. 4 - Prob. 4.13ECh. 4 - Prob. 4.14ECh. 4 - Adjustment for merchandise inventory shrinkage...Ch. 4 - Adjustment for Customer Refunds and Returns Assume...Ch. 4 - Prob. 4.17ECh. 4 - Multiple-step income statement On March 31, 20Y5,...Ch. 4 - Single-step income statement Summary operating...Ch. 4 - Multiple-step income statement Identify the enurs...Ch. 4 - Purchase-related transactions The following...Ch. 4 - Sales-related transactions The- following selected...Ch. 4 - Prob. 4.3PCh. 4 - Multiple-step income statement and report form of...Ch. 4 - Multiple-step income statement and report form of...Ch. 4 - Multiple-step income statement and report form of...Ch. 4 - Multiple-step income statement and report form of...Ch. 4 - Single-step income statement Selected accounts and...Ch. 4 - Prob. 4.5.2PCh. 4 - Prob. 4.6.1PCh. 4 - Prob. 4.6.2PCh. 4 - Prob. 4.1MBACh. 4 - Sales transactions Using transactions listed in...Ch. 4 - Prob. 4.3MBACh. 4 - Prob. 4.4MBACh. 4 - Prob. 4.5.1MBACh. 4 - Gross margin percent and markup percent Target...Ch. 4 - Gross margin percent and markup percent Target...Ch. 4 - Prob. 4.6MBACh. 4 - Gross profit percent and markup percent Deere &...Ch. 4 - Prob. 4.7.2MBACh. 4 - Gross profit percent and markup percent Deere &...Ch. 4 - Gross profit percent and markup percent...Ch. 4 - Gross profit percent and markup percent...Ch. 4 - Gross profit percent and markup percent...Ch. 4 - Prob. 4.9MBACh. 4 - Prob. 4.10.1MBACh. 4 - Gross profit percent and markup percent Companies...Ch. 4 - Prob. 4.10.3MBACh. 4 - Prob. 4.1CCh. 4 - Prob. 4.2CCh. 4 - Prob. 4.3.1CCh. 4 - Determining cost of purchase The following is an...Ch. 4 - Prob. 4.4.1CCh. 4 - Prob. 4.4.2CCh. 4 - Prob. 4.4.3CCh. 4 - Prob. 4.5C
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- Gross profit percent and markup percent Deere & Company (DE) produces and sells tractors, loaders, combines, lawnmowers, and a variety of other equipment. The following data (in millions) were adapted from recent financial statements of Deere. Compute the gross profit percent for Years 1 and 2. Round to one decimal place.arrow_forwardGross profit percent and markup percent Caterpillar Inc. (CAT) produces and sells various types of equipment. including tractors, loaders, and mining equipment. The following data (in millions) were adapted from recent financial statements of Caterpillar. Compute the average markup percent for Years 1 and 2. Round to one decimal place.arrow_forwardGross profit percent and markup percent Caterpillar Inc. (CAT) produces and sells various types of equipment. including tractors, loaders, and mining equipment. The following data (in millions) were adapted from recent financial statements of Caterpillar. Compute the gross profit percent for Years 1 and 2. Round to one decimal place.arrow_forward
- Return on assets The following data (in millions) were adapted from recent financial statements of Tootsie Roll Industries Inc. (TR): The percent a company adds to its cost of sales to determine selling price is called a markup. What is Tootsie Roll’s markup percent? Round to one decimal place.arrow_forwardGross profit percent and markup percent Caterpillar Inc. (CAT) produces and sells various types of equipment, including tractors, loaders, and mining equipment. The following data (in millions) were adapted from recent financial statements of Caterpillar. Compare the results in parts (1) and (2) for Years 1 and 2. Comment on your comparison.arrow_forwardJuroe Company provided the following income statement for last year: Juroes balance sheet as of December 31 last year showed total liabilities of 10,250,000, total equity of 6,150,000, and total assets of 16,400,000. Required: 1. Calculate the return on sales. (Note: Round the percent to two decimal places.) 2. CONCEPTUAL CONNECTION Briefly explain the meaning of the return on sales ratio, and comment on whether Juroes return on sales ratio appears appropriate.arrow_forward
- Working Backward: Gross Profit Ratio Acmes gross profit ratio increased by 20% over the prior year. Net sales and cost of goods sold for the prior year were $120,000 and $90,000, respectively. Cost of goods sold for the current year is $140,000. Required Determine the amount of Acmes sales for the current year.arrow_forwardSundahl Companys income statements for the past 2 years are as follows: Refer to the information for Sundahl Company above. Required: 1. Prepare a common-size income statement for Year 1 by expressing each line item as a percentage of sales revenue. (Note: Round percentages to the nearest tenth of a percent.) 2. Prepare a common-size income statement for Year 2 by expressing each line item as a percentage of sales revenue. (Note: Round percentages to the nearest tenth of a percent.)arrow_forwardReturn on assets The financial statements of The Hershey Company (HSY) are shown in Exhibits 6 through 9 of this chapter. Based upon these statements, answer the following questions. The percent that a company adds to its cost of sales to determine the selling price is called a markup. That is Hershey’s markup percent? Round to one decimal place.arrow_forward
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