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Revenue and expense data for Bluestem Company are as follows: Year 2 Year 1 Administrative expenses $37,000 $20,000 Cost of goods sold 350,000 320,000 Income
Revenue and expense data for Bluestem Company are as follows:
Year 2 | Year 1 | ||
Administrative expenses | $37,000 | $20,000 | |
Cost of goods sold | 350,000 | 320,000 | |
Income tax | 40,000 | 32,000 | |
Sales | 800,000 | 700,000 | |
Selling expenses | 150,000 | 110,000 |
a. Prepare a comparative income statement, with vertical analysis, stating each item for both years as a percent of sales. Round percents to one decimal point.
Bluestem Company | ||||
Comparative Income Statement | ||||
For Years Ended December 31, Year 2 and Year 1 | ||||
Year 2 Amount | Year 2 Percent | Year 1 Amount | Year 1 Percent | |
$ | % | $ | % | |
% | % | |||
$ | % | $ | % | |
% | % | |||
% | % | |||
Total operating expenses | $ | % | $ | % |
$ | % | $ | % | |
% | % | |||
$ | % | $ | % |
b. Complete the following regarding significant changes disclosed by the comparative income statement.
The most significant increase in expenses is , which offsets the decrease in , resulting in the overall of net income.
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