SURVEY OF ACCOUNTING 360DAY CONNECT CAR
5th Edition
ISBN: 9781260591811
Author: Edmonds
Publisher: MCG
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Question
Chapter 9, Problem 2E
To determine
Express each income statement component for each of the two years as a percentage of sales.
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Vertical analysis
Two income statements for Cornea Company follow:
Cornea Company
Income Statements
For the Years Ended December 31
20Y9
20Y8
Fees earned
$1,570,000
$1,300,000
Expenses
(832,100)
(780,000)
Net income
$737,900
$520,000
Required:
a. Prepare a vertical analysis of Cornea Company’s income statements. If required, round your percentage to the nearest whole number.
Cornea Company
Income Statements
For the Years Ended December 31
20Y9
20Y8
Amount
Percent
Amount
Percent
Fees earned
$1,570,000
%
$1,300,000
%
Expenses
(832,100)
%
(780,000)
%
Operating income
$737,900
%
$520,000
%
b. Does the vertical analysis indicate a favorable or an unfavorable trend?
5. 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 expenses
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.
...
b. Complete the following regarding the significant changes disclosed by the comparative income statement.
The vertical analysis indicates that the cost of goods sold as a percent of sales (increased/decreased) between the two years. Selling and administrative expenses as a percentage of sales (increased/decreased) and income tax expense (increased/decreased). Overall, net income as a percent of sales (increased/decreased).
Chapter 9 Solutions
SURVEY OF ACCOUNTING 360DAY CONNECT CAR
Ch. 9 - 1. Why are ratios and trends used in financial...Ch. 9 - Prob. 2QCh. 9 - Prob. 3QCh. 9 - 4. What is the significance of inventory turnover,...Ch. 9 - 5. What is the difference between the current...Ch. 9 - Prob. 6QCh. 9 - Prob. 7QCh. 9 - Prob. 8QCh. 9 - 9. What are some limitations of the earnings per...Ch. 9 - Prob. 10Q
Ch. 9 - Prob. 11QCh. 9 - Prob. 12QCh. 9 - Prob. 13QCh. 9 - Prob. 14QCh. 9 - Exercise 9-1 Horizontal analysis Winthrop...Ch. 9 - Prob. 2ECh. 9 - Prob. 3ECh. 9 - Prob. 4ECh. 9 - Prob. 5ECh. 9 - Prob. 6ECh. 9 - Prob. 7ECh. 9 - Prob. 8ECh. 9 - Comprehensive analysis The December 31, 2019,...Ch. 9 - Prob. 10ECh. 9 - Prob. 11ECh. 9 - Prob. 12ECh. 9 - Ratio analysis Compute the specified ratios using...Ch. 9 - Prob. 14ECh. 9 - LO 13-2, 13-3, 13-4, 13-5 Exercise 13-15A...Ch. 9 - Prob. 16PCh. 9 - Prob. 17PCh. 9 - Prob. 18PCh. 9 - Prob. 19PCh. 9 - Prob. 20PCh. 9 - Problem 9-21 Ratio analysis Selected data for...Ch. 9 - Prob. 22PCh. 9 - Problem 9-23 Ratio analysis The following...Ch. 9 - Prob. 24PCh. 9 - Prob. 1ATCCh. 9 - Prob. 3ATCCh. 9 - ATC 9-5 Ethical Dilemma Making the ratios look...
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- Cuneo Companys income statements for the last 3 years are as follows: Refer to the information for Cuneo 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.) 3. Prepare a common-size income statement for Year 3 by expressing each line item as a percentage of sales revenue. (Note: Round percentages to the nearest tenth of a percent.)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_forward
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