Financial & Managerial Accounting
Financial & Managerial Accounting
13th Edition
ISBN: 9781285866307
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 15, Problem 15.5EX

1.

To determine

Horizontal Analysis

Horizontal analysis refers to the measurement of percentage change in the comparative financial statements. It compares the items from the financial statements from one to the other years, and indicates the trends.

To Prepare: The horizontal analysis of the comparative income statement of Company M.

2.

To determine

To provide: Conclusion from the horizontal analysis.

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Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent years ended December 31, are as follows: Current Year Previous Year Sales $965,200 $760,000 Cost of goods sold 818,400 660,000 Gross profit $146,800 $100,000 Selling expenses $43,290 $37,000 Administrative expenses 38,750 31,000 Total operating expenses $82,040 $68,000 Income before income tax $64,760 $32,000 Income tax expenses 25,900 12,800 Net income $38,860 $19,200 a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. If required, round to one decimal place. Winthrop Company Comparative Income Statement For the Years Ended December 31 Current Previous Increase Increase year year (Decrease) (Decrease) Amount Amount Amount Percent Sales $965,200 $760,000 % Cost of goods sold 818,400 660,000 % Gross profit $146,800 $100,000 % Selling expenses $43,290 $37,000 % Administrative…
Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent years ended December 31, are as follows: Current Year Previous Year Sales $897,900 $730,000 774,400 Cost of goods sold 640,000 Gross profit $123,500 $90,000 Selling expenses $35,030 $31,000 Administrative expenses 31,460 26,000 Total operating expenses $66,490 $57,000 $57,010 Income before income tax $33,000 22,800 Income tax expenses 13,200 $34,210 $19,800 Net income a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. If required, round to one decimal place. Winthrop Company Comparative Income Statement For the Years Ended December 31 Current Previous Increase (Decrease) (Decrease) Percent Increase year Amount year Amount Amount
Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent years ended December 31, are as follows:       Current Year       Previous Year Sales $878,400     $720,000   Cost of goods sold 725,900     610,000   Gross profit $152,500     $110,000   Selling expenses $42,560     $38,000   Administrative expenses 38,400     32,000   Total operating expenses $80,960     $70,000   Income before income tax $71,540     $40,000   Income tax expenses 28,600     16,000   Net income $42,940     $24,000   a.  Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. If required, round to one decimal place. Winthrop Company Comparative Income Statement For the Years Ended December 31   CurrentyearAmount PreviousyearAmount Increase(Decrease)Amount Increase(Decrease)Percent Sales $878,400 $720,000 $ % Cost of goods…

Chapter 15 Solutions

Financial & Managerial Accounting

Ch. 15 - Prob. 15.1APECh. 15 - Prob. 15.1BPECh. 15 - Prob. 15.2APECh. 15 - Vertical analysis Income statement information for...Ch. 15 - Prob. 15.3APECh. 15 - Prob. 15.3BPECh. 15 - Accounts receivable analysis A company reports the...Ch. 15 - Accounts receivable analysis A company reports the...Ch. 15 - Prob. 15.5APECh. 15 - Inventory analysis A company reports the...Ch. 15 - Prob. 15.6APECh. 15 - Long-term solvency analysis The following...Ch. 15 - Prob. 15.7APECh. 15 - Times interest earned A company reports the...Ch. 15 - Prob. 15.8APECh. 15 - Prob. 15.8BPECh. 15 - Prob. 15.9APECh. 15 - Prob. 15.9BPECh. 15 - Prob. 15.10APECh. 15 - Common stockholders' profitability analysis A...Ch. 15 - Prob. 15.11APECh. 15 - Earnings per share and price-earnings ratio A...Ch. 15 - Prob. 15.1EXCh. 15 - Vertical analysis of income statement The...Ch. 15 - Common-sized income statement Revenue and expense...Ch. 15 - Vertical analysis of balance sheet Balance sheet...Ch. 15 - Prob. 15.5EXCh. 15 - Current position analysis The following data were...Ch. 15 - Prob. 15.7EXCh. 15 - Prob. 15.8EXCh. 15 - Prob. 15.9EXCh. 15 - Prob. 15.10EXCh. 15 - Inventory analysis The following data were...Ch. 15 - Inventory analysis Dell Inc. and Hewlett-Packard...Ch. 15 - Prob. 15.13EXCh. 15 - Prob. 15.14EXCh. 15 - Prob. 15.15EXCh. 15 - Prob. 15.16EXCh. 15 - Profitability ratios The following selected data...Ch. 15 - Profitability ratios Ralph Lauren Corporation...Ch. 15 - Six measures of solvency or profitability The...Ch. 15 - Five measures of solvency or profitability The...Ch. 15 - Prob. 15.21EXCh. 15 - Prob. 15.22EXCh. 15 - Prob. 15.23EXCh. 15 - Prob. 15.24EXCh. 15 - Prob. 15.25EXCh. 15 - Prob. 15.26EXCh. 15 - Horizontal analysis of income statement For 2016,...Ch. 15 - Prob. 15.2APRCh. 15 - Prob. 15.3APRCh. 15 - Nineteen measures of solvency and profitability...Ch. 15 - Solvency and profitability trend analysis Addai...Ch. 15 - Prob. 15.1BPRCh. 15 - Prob. 15.2BPRCh. 15 - Effect of transactions on current position...Ch. 15 - Nineteen measures of solvency and profitability...Ch. 15 - Prob. 15.5BPRCh. 15 - Financial Statement Analysis The financial...Ch. 15 - Prob. 15.1CPCh. 15 - Prob. 15.2CPCh. 15 - Prob. 15.3CPCh. 15 - Prob. 15.4CPCh. 15 - Prob. 15.5CP
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