Question
Preparing Common-Size Income Statements by Using Base Period Horizontal Analysis Scherer Company provided the following income statements for its first 3 years of operation: Scherer
Preparing Common-Size Income Statements by Using Base Period Horizontal Analysis
Scherer Company provided the following income statements for its first 3 years of operation:
| Scherer Company Income Statements Years of Operation | |||
| Year 1 | Year 2 | Year 3 | |
| Net sales | $1,000,000.00 | $1,100,000.00 | $1,300,000.00 |
| Less: Cost of goods sold | (300,000.00) | (310,000.00) | (364,000.00) |
| Gross margin | $700,000.00 | $790,000.00 | $936,000.00 |
| Less: | |||
| Operating expenses | (421,000.00) | (484,000.00) | (591,000.00) |
| Income taxes | (111,600.00) | (122,400.00) | (137,800.00) |
| Net income | $167,400.00 | $183,600.00 | $206,200.00 |
Required:
Prepare common-size income statements by using Year 1 as the base period. (Note: Enter all amounts as positive numbers, except for a net loss. Enter net loss as a negative number, if applicable. Round answers to the nearest whole percentage.)
| Year 1 | Year 1 | Year 2 | Year 2 | Year 3 | Year 3 | |
| Dollars | Percentage | Dollars | Percentage | Dollars | Percentage | |
| Net sales | $1,000,000 | 100% | 1,100,000 | 110% | $1,300,000 | 130% |
| Less: Cost of goods sold | (300,000) | 100% | (310,000) | 103% | (364,000) | 121% |
| Gross margin | $700,000 | 100% | $790,000 | fill in the blank | $936,000 | fill in the blank |
| Less: | ||||||
| Operating expenses | (421,000) | fill in the blank | (484,000) | fill in the blank | (591,000) | fill in the blank |
| Income taxes | (111,600) | fill in the blank | (122,400) | fill in the blank | (137,800) | fill in the blank |
| Net income | $167,400 | fill in the blank | $183,600 | fill in the blank | $206,200 | fill in the blank |
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The Legal Environment of Business A Critical Thinking Approach
Authors: Nancy K Kubasek, Bartley A Brennan, M Neil Browne
6th Edition
978-0132666688, 132666685, 132664844, 978-0132664844
