Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Current Year Prevlous Year Sales $4,000,000 $3,600,000 Cost of goods sold 2,280,000 1,872,000 Selling expenses 600,000 648,000 Administrative expenses 520,000 360,000 Income tax expense 240,000 216,000 a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. Round to the nearest whole percentage.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Vertical Analysis of Income Statement
Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows:
Current Year
Prevlous Year
Sales
$4,000,000
$3,600,000
Cost of goods sold
2,280,000
1,872,000
Selling expenses
600,000
648,000
Administrative expenses
520,000
360,000
Income tax expense
240,000
216,000
a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. Round to the nearest whole percentage.
Transcribed Image Text:Vertical Analysis of Income Statement Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Current Year Prevlous Year Sales $4,000,000 $3,600,000 Cost of goods sold 2,280,000 1,872,000 Selling expenses 600,000 648,000 Administrative expenses 520,000 360,000 Income tax expense 240,000 216,000 a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. Round to the nearest whole percentage.
a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. Round to the nearest whole percentage.
Innovation Quarter Inc.
Comparative Income Statement
For the Years Ended December 31
Current year
Current year
Previous year
Previous year
Amount
Percent
Amount
Percent
Sales
$4,000,000
100 v % $3,600,000
100 v %
Cost of goods sold
(2,280,000)
57
(1,872,000)
52 v %
Gross profit v
1,720,000 V
1,728,000 V
48
Selling expenses
$(600,000)
15
V % $(648,000)
18
Administrative expenses
(520,000)
13
(360,000)
10
240,000 X
6 X % $
216,000 X
6 X %
Net income x
Operating Income v
360,000 X
9 X %
504,000 x
14 X %
(240,000)
6 v %
(216,000)
Income tax expense
%
%
Transcribed Image Text:a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. Round to the nearest whole percentage. Innovation Quarter Inc. Comparative Income Statement For the Years Ended December 31 Current year Current year Previous year Previous year Amount Percent Amount Percent Sales $4,000,000 100 v % $3,600,000 100 v % Cost of goods sold (2,280,000) 57 (1,872,000) 52 v % Gross profit v 1,720,000 V 1,728,000 V 48 Selling expenses $(600,000) 15 V % $(648,000) 18 Administrative expenses (520,000) 13 (360,000) 10 240,000 X 6 X % $ 216,000 X 6 X % Net income x Operating Income v 360,000 X 9 X % 504,000 x 14 X % (240,000) 6 v % (216,000) Income tax expense % %
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