Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Question
Chapter 9, Problem 2E
To determine
Express each income statement component for each of the two years as a percentage of sales.
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Students have asked these similar questions
Adams Company reported the following operating results for two consecutive years:
Required
Compute each income statement component for each of the two years as a percent of sales.
Note: Percentages may not add exactly due to rounding. Round your answers to 1 decimal place. (i.e., .234 should be entered as
23.4).
Sales
Cost of goods sold
Gross margin on sales
Operating expenses
Income before taxes
Income taxes
Net income
ADAMS COMPANY
Vertical Analysis of Income Statements
Year 4
Percentage of
Sales for Year 4
100.0
%
$
$
X Answer is not complete.
999,500
549,725
449,775
129,400
320,375
81,000
239,375
%
$
$
Year 3
1,081,500
598,400
483,100
152,000
331,100
80,400
250,700
Percentage of
Sales for Year 3
100.0 %
%
a. Prepare a vertical analysls
percents as whole numbers.
Versatile Company
Income Statements
For the Years Ended December 31
20Y5
20Y5 Percent
20Y4
20Y4 Percent
Amount
Amount
Fees earned
$793,000
100 %
$672,000
100 %
Operating expenses
650,260
81 %
591,360
86 %
Income from
$142,740
19 %
$80,640
14 %
operations
b. Does the vertical analysis indicate a favorable or an unfavorable trend?
Common-Sized Income Statement
Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. Tannenhill's data are expressed in dollars. The electronics industry averages are
expressed in percentages.
Electronics
Tannenhill
Industry
Company
Average
Sales
$820,000
100 %
Cost of goods sold
524,800
70
Gross profit
$295,200
30 %
Selling expenses
$180,400
17 %
Administrative expenses
65,600
7
Total operating expenses
$246,000
24 %
Operating income
$49,200
6 %
Other revenue
16,400
2
$65,600
8 %
Other expense
8,200
1
Income before income tax
$57,400
7 %
Income tax expense
24,600
4
Net income
$32,800
3 %
Chapter 9 Solutions
Survey Of Accounting
Ch. 9 - 1. Why are ratios and trends used in financial...Ch. 9 - Prob. 2QCh. 9 - Prob. 3QCh. 9 - 4. What is the significance of inventory turnover,...Ch. 9 - 5. What is the difference between the current...Ch. 9 - Prob. 6QCh. 9 - Prob. 7QCh. 9 - Prob. 8QCh. 9 - 9. What are some limitations of the earnings per...Ch. 9 - Prob. 10Q
Ch. 9 - Prob. 11QCh. 9 - Prob. 12QCh. 9 - Prob. 13QCh. 9 - Prob. 14QCh. 9 - Exercise 9-1 Horizontal analysis Winthrop...Ch. 9 - Prob. 2ECh. 9 - Prob. 3ECh. 9 - Prob. 4ECh. 9 - Prob. 5ECh. 9 - Prob. 6ECh. 9 - Prob. 7ECh. 9 - Prob. 8ECh. 9 - Comprehensive analysis The December 31, 2019,...Ch. 9 - Prob. 10ECh. 9 - Prob. 11ECh. 9 - Prob. 12ECh. 9 - Ratio analysis Compute the specified ratios using...Ch. 9 - Prob. 14ECh. 9 - LO 13-2, 13-3, 13-4, 13-5 Exercise 13-15A...Ch. 9 - Prob. 16PCh. 9 - Prob. 17PCh. 9 - Prob. 18PCh. 9 - Prob. 19PCh. 9 - Prob. 20PCh. 9 - Problem 9-21 Ratio analysis Selected data for...Ch. 9 - Prob. 22PCh. 9 - Problem 9-23 Ratio analysis The following...Ch. 9 - Prob. 24PCh. 9 - Prob. 1ATCCh. 9 - Prob. 3ATCCh. 9 - ATC 9-5 Ethical Dilemma Making the ratios look...
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