Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Lake Athletics has provided you with the Income Statements for two of its product lines for the year ended December 31. The Controller has asked

Lake Athletics has provided you with the Income Statements for two of its product lines for the year ended December 31. The Controller has asked you to perform the vertical analysis of the product lines and compare the two products. (PLEASE PROVIDE FORMULA VIEW FOR ALL HIGHLIGHT AREAS)

image text in transcribed

1 |Lake Athletics sells two distinct product lines: Apparel and Equipment. | 2 The income statement for each product line appears below. LAKE ATHLETICS Income Statement For the Year Ended December 31, 20X1 Apparel Equipment Amount Percent Amount Percent 9 Net sales $3,150,000 $5,550,000 10 Cost of goods sold 1,400,000 2,720,000 11 Gross profit 1,750,000 2,830,000 12 Operating expenses 800,000 875,000 13 Operating income 950,000 1,955,000 14 Other income 20,000 10,000 15 Income before tax 970,000 1,965,000 16 Income tax expense 241,250 491,000 17 Net income $728,750 $1,474,750 18 19 Required: 20 1. Use appropriate Excel formulas to perform vertical analysis and complete the "Percent" columns 21 for both product lines above. Express each amount as a percentage of net sales. 22 Note: You should use absolute references in the divisors of all formulas. 23 2. Use the Excel IF function and the completed vertical analysis above to answer each of the questions below: 25 26 Which product line has the highest gross profit %? Which product line has the highest net income %? 27

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Issues In Management Accounting

Authors: Trevor Hopper, Robert W. Scapens, Deryl Northcott

3rd Edition

0273702572, 978-0273702573

More Books

Students also viewed these Accounting questions

Question

What is the biggest strength of the program?

Answered: 1 week ago

Question

Define Management by exception

Answered: 1 week ago

Question

Explain the importance of staffing in business organisations

Answered: 1 week ago

Question

What are the types of forms of communication ?

Answered: 1 week ago

Question

List the five steps in the message-sending process.

Answered: 1 week ago

Question

List and explain the four steps in the communication process.

Answered: 1 week ago

Question

Describe how communication flows through organizations.

Answered: 1 week ago