EBK ACCOUNTING PRINCIPLES
13th Edition
ISBN: 9781119411017
Author: Weygandt
Publisher: WILEY
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Chapter 17, Problem 3PSA
To determine
Introduction: The
To prepare: The operating activity section of the cash flow statement under the indirect method.
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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:
Sales
Cost of goods sold
Gross profit
Selling expenses
Administrative expenses
Total operating expenses
Income before income tax
Income tax expenses
Net income
Current Year
$381,300
312,000
$69,300
$19,210
18,150
$37,360
$31,940
12,800
$19,140
Previous Year
$310,000
260,000
$50,000
$17,000
15,000
$32,000
$18,000
7,200
$10,800
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
Cost of goods sold
Gross profit
Selling expenses
Administrative expenses
Total operating expenses
Income before income tax expense
Income tax expense
Net income
$2,240,000
(1,925,000)
$315,000
$(152,500)
(118,000)
$(270,500)
$44,500
(17,800)
$26,700
$2,000,000
(1,750,000)
$250,000
$(125,000)
(100,000)
$(225,000)
$25,000
(10,000)
$15,000
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.
Sales
Cost of merchandise sold
Gross profit
Selling expenses
Winthrop Company
Comparative Income Statement
For the Years Ended December 31
Administrative expenses
Total operating expenses
Income before income tax expense
Income tax expense
Net income
profit to be
Increase
Current Previous Increase
year
year (Decrease) (Decrease)
Amount Amount Amount Percent
$611,000 $470,000 $
520,700 410,000
$90,300
$27,600
24,320
$51,920
$38,380
15,400
$22,980
$60,000
$23.000
19,000
$42,000
$18,000 $
7,200
$10,800
%
%
%
%
%
%
%
%
%
b. The net income for Winthrop Company increased between years. This increase was the combined result of an
in cost of merchandise sold. The cost of merchandise sold increased at a
than the percentage increase in sales.
in sales and
percentage
rate than the increase in…
Chapter 17 Solutions
EBK ACCOUNTING PRINCIPLES
Ch. 17 - Prob. 1QCh. 17 - Prob. 2QCh. 17 - Prob. 3QCh. 17 - Prob. 4QCh. 17 - Prob. 5QCh. 17 - Prob. 6QCh. 17 - 7. Why is it necessary to use comparative balance...Ch. 17 - 8. Contrast the advantages and disadvantages of...Ch. 17 - Prob. 9QCh. 17 - Prob. 10Q
Ch. 17 - Prob. 11QCh. 17 - Prob. 12QCh. 17 - Prob. 13QCh. 17 - Prob. 14QCh. 17 - Prob. 15QCh. 17 - Prob. 16QCh. 17 - Prob. 17QCh. 17 - Prob. 18QCh. 17 - Prob. 19QCh. 17 - Prob. 20QCh. 17 - Prob. 21QCh. 17 - Prob. 22QCh. 17 - Prob. 1BECh. 17 - Prob. 2BECh. 17 - Prob. 3BECh. 17 - Prob. 4BECh. 17 - Prob. 5BECh. 17 - Prob. 6BECh. 17 - Prob. 7BECh. 17 - Prob. 8BECh. 17 - BE17-9 Hinck Corporation reported net cash...Ch. 17 - BE17-10 Suppose in a recent quarter, Alliance...Ch. 17 - BE17-11 The management of Morrow Inc. is trying to...Ch. 17 - BE17-12 Suppose Columbia Sportswear Company had...Ch. 17 - Prob. 13BECh. 17 - Prob. 14BECh. 17 - Prob. 1DIECh. 17 - Prob. 2aDIECh. 17 - Prob. 2bDIECh. 17 - Prob. 3DIECh. 17 - Prob. 1ECh. 17 - E17-2 An analysis of comparative balance sheets,...Ch. 17 - Prob. 3ECh. 17 - Prob. 4ECh. 17 - Prob. 5ECh. 17 - Prob. 6ECh. 17 - Prob. 7ECh. 17 - Prob. 8ECh. 17 - Prob. 9ECh. 17 - Prob. 10ECh. 17 - Prob. 11ECh. 17 - E17-11 Suppose a recent income statement for...Ch. 17 - Prob. 13ECh. 17 - Prob. 14ECh. 17 - Prob. 1PSACh. 17 - Prob. 2PSACh. 17 - Prob. 3PSACh. 17 - Prob. 4PSACh. 17 - Prob. 5PSACh. 17 - Prob. 6PSACh. 17 - Prob. 7PSACh. 17 - P17-8A Data for Nosker Company are presented in...Ch. 17 - Prob. 9PSACh. 17 - Prob. 10PSACh. 17 - Prob. 11PSACh. 17 - Prob. 17CCCh. 17 - Prob. 2EYCTCh. 17 - Prob. 3EYCTCh. 17 - Prob. 4EYCTCh. 17 - Prob. 5EYCTCh. 17 - Prob. 7EYCTCh. 17 - Prob. 1ISTQCh. 17 - Prob. 2ISTQCh. 17 - Prob. 3ISTQCh. 17 - Prob. 4ISTQCh. 17 - Prob. 5ISTQCh. 17 - Prob. 1IFRECh. 17 - Prob. 2IFRECh. 17 - Prob. 3IFRP
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