Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
expand_more
expand_more
format_list_bulleted
Related questions
Question
Donna Drysdale, co-owner of Drysdale Pizza, provides you with the following information for 2015 and 2016. Conduct a vertical analysis (common-size income statement) for the income statements.
This question is divided into three parts: Part 1
| 2014 | 2015 | 2014% | 2015% | Change in % | |
| Revenues: | |||||
| Food | 800,000 | 850,000 | |||
| Other | 50,000 | 60,000 | 5.88 | 6.59 | 0.71 |
| Total Revenues | 100 | 100 | 0 | ||
| Cost of Sales: | |||||
| Food | 160,000 | 170,000 | 88.89 | 87.63 | -1.26 |
| Other | 20,000 | 24,000 | 11.11 | 12.37 | 1.26 |
| Total cost of Sales | 180,000 | 194,000 | 21.18 | 21.32 | 0.14 |
| Gross Profit: | |||||
| Food | 640,000 | 680,000 | |||
| Other | 30,000 | 36,000 | 3.53 | 3.96 | 0.43 |
| Total Gross Profit | 670,000 | 716,000 | 78.82 | 78.68 | -0.14 |
| Operating (Controllable)Expenses: | |||||
| Salaries and Wages | 160,000 | 170,000 | 18.82 | 18.68 | -0.14 |
| Employee Benefits | 50,000 | 55,000 | 5.88 | 6.04 | 0.16 |
| Other | 150,000 | 170,000 | |||
| Total Operating Expenses | 360,000 | 395,000 | 42.35 | 43.41 | 1.05 |
| Operating Income | |||||
| Other(Non-Controllable)Expenses: | |||||
| 80,000 | 80,000 | 9.41 | 8.79 | -0.62 | |
| Interest Expense | 80,000 | 75,000 | 9.41 | 8.24 | -1.17 |
| Occupation Costs | 40,000 | 45,000 | |||
| Total Non-controllable Expenses | 200,000 | 200,000 | 23.53 | 21.98 | |
| Income before Income Taxes | 12.94 | 13.30 | 0.36 | ||
| Interest Taxes | 30,000 | 35,000 | 3.53 | 3.85 | 0.32 |
| Net Income | 80,000 | 86,000 | 9.41 | 9.45 | 0.04 |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by stepSolved in 2 steps
Knowledge Booster
Similar questions
- Comparing Two Companies in the Same Industry: Chipotle and Panera Bread This case should be completed after responding to the requirements in Decision Case 13-2. Refer to the financial statement information of Chipotle and Panera Bread reprinted at the back of the book. Required Using the format in Example 13-5, prepare common-size comparative income statements for 2014 and 2013, for Panera Bread. Use total revenues as the base (i.e., 100%). Round all percentages to the nearest one-tenth of a percent. The common-size comparative income statements indicate the relative importance of items on the statement. Compare the common-size income statements of Panera Bread and Chipotle. What are the most important differences between the two companies income statements? Using the format in Example 13-4, prepare common-size comparative balance sheets at the end of 2014 and 2013, for Panera Bread. Round all percentages to the nearest one-tenth of a percent. The common-size comparative balance sheets indicate the relative importance of items on the statement. Compare the common-size balance sheets of Panera Bread and Chipotle. What are the most important differences between the two companies balance sheets?arrow_forwardPlease see below. I really need help with this asap. Please include relevant terms and dates as needed.arrow_forwardCompute for the profitability ratio, operating efficiency, and financial health of the given data below.arrow_forward
- Use the following tables to answer the question: LOGIC COMPANY Income Statement For years ended December 31, 2016 and 2017 (values in $) 2016 2017 Gross sales 19,800 15,600 Sales returns and allowances 900 100 Net sales 18,900 15,500 COGS 11,800 8,800 Gross profit 7,100 6,700 Depreciation 780 640 Selling and administrative expenses 2,800 2,400 Research 630 540 Miscellaneous 440 340 Total operating expenses 4,650 3,920 Income before interest and taxes 2,450 2,780 Interest expense 640 540 Income before taxes 1,810 2,240 Provision for taxes 724 896 LOGIC COMPANY Balance Sheet For years ended December 31, 2016 and 2017 (values in $) 2016 2017 Current assets 12,300 9,400 Accounts receivable 16,900 12,900 Merchandise inventory 8,900 14,400 Prepaid expenses 24,400 10,400 Total current assets 62,500 47,100 Building (net) 14,900 11,400 Land 13,900 9,400 Total plant and equipment 28,800 20,800 Total assets 91,300 67,900 Accounts payable 13,400 7,400 Salaries payable 7,500 5,400 Total current…arrow_forwardA condensed income statement for Northeast Airlines and a partially completed vertical analysis are presented below. ts Required: 1. Complete the vertical analysis by computing each missing line item as a percentage of sales revenues. (Round your answers to the nearest whole percent.) еВook Print NORTHEAST AIRLINES Income Statement (summarized) For the Year Ended December 31 eferences (in millions of U.S. dollars) 2016 2015 Sales Revenues $ 20,925 100 $ 20,320 100 % Salaries and Wages Expense 6,823 33 6,408 Fuel, Oil, Repairs, and Maintenance 4,717 4,646 Other Operating Expenses 5,200 4,725 23 Other Expenses (Revenues) 238 1 652 Income before Income Tax Expense 3,947 19 3,889 19 Income Tax Expense Net Income 1,370 7 1,361 7 $ 2,577 % $ 2,528 % 中arrow_forwardDirection: Answer the problem below and forecasts the income statement using percent of sales method. (Please refer to the picture)arrow_forward
- Perform a vertical analysis of the P&L (FS Company). "Formula: Vertical Analysis % Each income statement items / Revenues (or Net sales) Fill in each Blank. Round your answers to the nearest tenth percent, i.e. 4.5%. PLEASE SUBMIT YOUR ANSWERS IN % and include the % symbol. Do not leave any blank. If the answer is 0, be sure to put 0. Cost of goods sold Gross profit Net sales $858,000 Select] Other expenses Interest revenue Income from operations Interest expense 2018 Income before income taxes Income tax expense Net income 513,000 345,000 244,000 101,000 4,000 24,000 81,000 33,000 FS Company Comparative P&L statement Years Ended December 31, 2018 and 2017 48,000 % of sales Select J [Select] | Select | [Select] [Select] [Select] [ Select] Select] Select > >arrow_forwardfind the trend analysis of this income statment and balance sheetarrow_forwardPractice Helparrow_forward
- Top executive officers of Tildon Company, a merchandising firm, are preparing the next year's budget. The controller has provided everyone with the current year's projected income statement. Current Year $1,600,000 1,120,000 480,000 190,000 Sales revenue Cost of goods sold Gross profit Selling & administrative expenses Net income 290,000 Cost of goods sold is usually 70 percent of sales revenue, and selling and administrative expenses are usually 10 percent of sales plus a fixed cost of $30,000. The president has announced that the company's goal is to increase net income by 15 percent. Required The following items are independent of each other: a. Prepare a pro forma income statement. What percentage increase in sales would enable the company to reach its goal? b. The market may become stagnant next year, and the company does not expect an increase in sales revenue. The production manager believes that an improved production procedure can cut cost of goods sold by 2 percent. Prepare a…arrow_forwardplease explain the result of income statement that provided in image belowarrow_forward1. Data for Abakada Trading Company are given below: 2014 2015 Revenue 1,939,500 1,674,675 Cost of Goods Sold 900,000 843,975 Gross Profit 1,039,500 830,700 Selling and General Expenses 445,500 409,725 Other Expenses 37,575 30,825 Net Income 556,425 390,150 Requirements: a. Prepare a Vertical Analysis Statement A of Comprehensive Income for 2014 and 2015 for Abakada Trading Company. b. Prepare a horizontal analysis for Abakada Trading Company.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning - Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning