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Income statements for Stuart Company for Year 3 and Year 4 follow: STUART COMPANY Income Statements Year 4 Sales $200,700 Cost of goods sold 142,000
Income statements for Stuart Company for Year 3 and Year 4 follow: STUART COMPANY Income Statements Year 4 Sales $200,700 Cost of goods sold 142,000 Selling expenses 21,200 Administrative expenses 12,100 Interest expense 3,900 Total expenses $179,200 Income before taxes 21,500 Income taxes expense 6,700 Net income $ 14,800 Year 3 $180,700 120,000 19,200 14,100 5,900 $159,200 21,500 3,900 $ 17,600 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. Complete this question by entering your answers in the tabs below. Required A Required B Perform a horizontal analysis, showing the percentage change in each income statement component between Year 3 and Year 4. (Negative answers should be indicated by a minus sign. Round your percentage answers to 1 decimal place. (i.e., 0.234 should be entered as 23.4).) STUART COMPANY Horizontal Analysis of Income Statements Percentage Change over Year 3 Sales % Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes Income taxes expense Net income (Loss) % Required A Required B Perform a vertical analysis, showing each income statement component as a percentage of sales for each year. (Percentages may not add exactly due to rounding. Round your percentage answers to 1 decimal place. i.e., 0.234 should be entered as 23.4).) STUART COMPANY Vertical Analysis of Income Statements Percentage of Percentage of Sales Year 4 Sales Year 3 Sales % % Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes Income taxes expense Net income % %
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