Income statements for Gibson Company for Year 3 and Year 4 follow: GIBSON COMPANY Income Statements Year 4 Year 3 $200,600 143,600 Sales Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses $180,600 121,600 19,500 14,500 5,800 $161,400 19,200 3,500 $ 15,700 21,500 12,500 3,800 $181,400 19,200 5,000 $ 14,200 Income before taxes Income taxes expense Net income Required a. Perform a horizontal analysis, showing the percentage change in each income statement component between Year 3 and Year 4. b. Perform a vertical analysis, showing each income statement component as a percentage of sales for each year.

Income statements for Gibson Company for Year 3 and Year 4 follow: GIBSON COMPANY Income Statements Year 4 Year 3 $200,600 143,600 Sales Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses $180,600 121,600 19,500 14,500 5,800 $161,400 19,200 3,500 $ 15,700 21,500 12,500 3,800 $181,400 19,200 5,000 $ 14,200 Income before taxes Income taxes expense Net income Required a. Perform a horizontal analysis, showing the percentage change in each income statement component between Year 3 and Year 4. b. Perform a vertical analysis, showing each income statement component as a percentage of sales for each year.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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