Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Revenue and expense data for Young Technologies Inc. are as follows: Year 2 Year 1 Sales $500,000 $440,000 Cost of goods sold 325,000 242,000 Selling

Revenue and expense data for Young Technologies Inc. are as follows:

Year 2 Year 1
Sales $500,000 $440,000
Cost of goods sold 325,000 242,000
Selling expense 70,000 79,200
Administrative expenses 75,000 70,400
Income tax expense 10,500 16,400

Required:

Question Content Area

a. Prepare an income statement in comparative form, stating each item for both years as an amount and as a percentage of sales. Round percentage amounts to the nearest whole percent.

Year 2 Amount Year 2 Percent Year 1 Amount Year 1 Percent
CashGross profitIncome from operations loss on discontinued operations sales $- Select - - Select -% $- Select - - Select -%
Cost of goods operations sales profitIncome from continuing operations income tax expenseOperating expenses - Select - - Select -% - Select - - Select -%
Gross sold gross on discontinued operations incomeprofitsoperations losses from asset impairmentSalesSupplies $- Select - - Select -% $- Select - - Select -%
CashGross profitIncome from operationsIncome tax expenseSelling expenses - Select - - Select -% - Select - - Select -%
Administrative expensesCashGross profit income tax expenseOperating expenses - Select - - Select -% - Select - - Select -%
Total expenses $fill in the blank dc5eb4f7202bfe5_26 fill in the blank dc5eb4f7202bfe5_27% $fill in the blank dc5eb4f7202bfe5_28 fill in the blank dc5eb4f7202bfe5_29%
CashCost of merchandise soldIncome from operationsSalesSupplies - Select - - Select -% - Select - - Select -%
CashCost of goods sold gross profit income tax expense sales - Select - - Select -% - Select - - Select -%
Net income loss $- Select - - Select -% $- Select - - Select -%

Question Content Area

b. Comment on the significant changes disclosed by the comparative income statement.

The vertical analysis indicates that the cost of goods sold as a percent of sales

profit income sold gross

between the two years. Selling and administrative expenses as a percentage of sales

profit income

and income tax expense

decreased increased

. Overall net income as a percent of sales

dropped raised decreased increased decreased increased expenses decreased increased expense sales income

.

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

Auditing Principle And Practice

Authors: Satyabrata Tripathy

1st Edition

9332519382, 9789332519381

More Books

Students also viewed these Accounting questions