Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN: 9781305654174
Author: Gary A. Porter, Curtis L. Norton
Publisher: Cengage Learning
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Textbook Question
Chapter 2, Problem 2.11AMCP
Comparability and Consistency in Income Statements
The following income statements were provided by Chisholm Company, a wholesale food distributor:
Required
- Identify each income statement as either single- or multiple-step format.
- Restate each item in the income statements as a percentage of sales. Why did net income remain unchanged when sales increased in 2016?
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GIVE THE COMPARATIVE INCOME STATEMENT HORIZONTAL AND VERTICAL ANALYSIS FROM THE FOLLOWING INCOME STATEMENT BELOW
JOLLIBEE INCOME STATEMENT
ITEM
2016
2017
2018
2019
2020
Sales/Revenue
113.81B
133.61B
161.17B
179.63B
129.31B
Sales Growth
-
17.40%
20.62%
11.45%
-28.01%
Cost of Goods Sold (COGS) incl. D&A
-
-
132.96B
150.88B
115.39B
COGS Growth
-
-
-
13.47%
-23.52%
COGS excluding D&A
89.27B
105.39B
121.08B
137.38B
100.82B
Depreciation & Amortization Expense
4B
4.75B
11.89B
13.5B
14.57B
Depreciation
3.93B
4.66B
11.73B
13.34B
14.32B
Amortization of Intangibles
68.99M
78.95M
151.82M
145.42M
245.23M
Gross Income
20.54B
23.48B
28.21B
28.75B
13.92B
Gross Income Growth
-
14.30%
20.12%
1.93%
-51.57%
Gross Profit Margin
-
-
-
-
10.77%
SG&A Expense
-
-
17.64B
20.21B
20.42B
SGA Growth
-
-
-…
Required information
[The following information applies to the questions displayed below.]
Vitamix reports the following information for its year ended December 31:
Cash sales
Sales on credit
General and administrative expenses
Sales returns
cost of goods sold
Sales discounts
Selling expenses
Use the above information to prepare the gross profit section of a multiple-step income statement.
VITAMIX
$ 88,000
118,000
31,000
13,800
87,000
4,800
52,000
Income Statement
For Year Ended December 31
$
0
0
0
Computing key ratios
The financial statements of Valerie’s Natural Foods include the following items:
Compute the following ratios for the current year:
a. Current ratio
b. Cash ratio
c. Acid-test ratio
d. Inventory turnover
e. Days’ sales in inventory
f. Days’ sales in receivables
g. Gross profit percentage
Chapter 2 Solutions
Financial Accounting: The Impact on Decision Makers
Ch. 2 - Read each definition below and write the number of...Ch. 2 - Prob. 2.1ECh. 2 - The Operating Cycle Two Wheeler Cycle Shop buys...Ch. 2 - Classification of Financial Statement Items Regal...Ch. 2 - Current Ratio Baldwin Corp. reported the following...Ch. 2 - Classification of Assets and Liabilities Indicate...Ch. 2 - Selling Expenses and General and Administrative...Ch. 2 - Prob. 2.7ECh. 2 - Income Statement Ratio The income statement of...Ch. 2 - Statement of Retained Earnings Landon Corporation...
Ch. 2 - Components of the Statement of Cash Flows Identify...Ch. 2 - Prob. 2.11ECh. 2 - Prob. 2.12MCECh. 2 - Prob. 2.13MCECh. 2 - Prob. 2.14MCECh. 2 - Materiality Joseph Knapp, a newly hired accountant...Ch. 2 - Costs and Expenses The following costs are...Ch. 2 - Prob. 2.3PCh. 2 - Prob. 2.4PCh. 2 - Working Capital and Current Ratio The balance...Ch. 2 - Single-Step Income Statement The following income...Ch. 2 - Multiple-Step Income Statement and Profit Margin...Ch. 2 - Statement of Cash Flows Colorado Corporation was...Ch. 2 - Basic Elements of Financial Reports Comparative...Ch. 2 - Prob. 2.10MCPCh. 2 - Prob. 2.11MCPCh. 2 - Prob. 2.12MCPCh. 2 - Prob. 2.1APCh. 2 - Prob. 2.2APCh. 2 - Prob. 2.3APCh. 2 - Prob. 2.4APCh. 2 - Working Capital and Current Ratio The balance...Ch. 2 - Single-Step Income Statement The following income...Ch. 2 - Prob. 2.7APCh. 2 - Prob. 2.8APCh. 2 - Prob. 2.9APCh. 2 - Comparability and Consistency in Income Statements...Ch. 2 - Prob. 2.12AMCPCh. 2 - Prob. 2.1DCCh. 2 - Prob. 2.2DCCh. 2 - Analysis of Cash Flow for a Small Business...Ch. 2 - Prob. 2.4DCCh. 2 - The Expenditure Approval Process Roberto is the...Ch. 2 - Prob. 2.6DC
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