evenue and expense data for
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 40E: Cuneo Companys income statements for the last 3 years are as follows: Refer to the information for...
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Question
Revenue and expense data for Young Technologies Inc. are as follows:
| Year 2 | Year 1 | |||
| Sales | $500,000 | $440,000 | ||
| Cost of merchandise 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:
Question Content Area
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.
| Year 2 Amount | Year 2 Percent | Year 1 Amount | Year 1 Percent | |
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| Total expenses | $fill in the blank 86d00500602205c_26 | fill in the blank 86d00500602205c_27% | $fill in the blank 86d00500602205c_28 | fill in the blank 86d00500602205c_29% |
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$- Select - | - Select -% | $- Select - | - Select -% |
Question Content Area
b. Complete the following regarding the significant changes disclosed by the comparative income statement.
The vertical analysis indicates that the Cost of merchandise sold as a percent of sales
between the two years. Selling and administrative expenses as a percentage of sales
and income tax expense
. Overall, net income as a percent of sales
.
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