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Vertical Analysis of Income Statement Revenue and expense data for Innovation Quarter Inc. for two recent years...

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Accounting

Vertical Analysis of Income Statement

Revenue and expense data for Innovation Quarter Inc. for tworecent years are as follows:

       CurrentYear       PreviousYear
Sales$432,000$372,000
Cost of goods sold267,840212,040
Selling expenses64,80063,240
Administrative expenses73,44059,520
Income tax expense8,64014,880

a. Prepare an income statement in comparativeform, stating each item for both years as a percent of sales. Ifrequired, round percentages to one decimal place. Enter all amountsas positive numbers.

Innovation Quarter Inc.
Comparative Income Statement
For the Years Ended December 31
Current year AmountCurrent year PercentPrevious year AmountPrevious year Percent
Sales$432,000%$372,000%
Cost of goods sold267,840%212,040%
Gross profit$%$%
Selling expenses64,800%63,240%
Administrative expenses73,440%59,520%
Total operating expenses$%$%
Income from operations%%
Income tax expense8,640%14,880%
Net income$%$%

Answer & Explanation Solved by verified expert
4.0 Ratings (530 Votes)

Innovation Quarter Inc
Comparative Income statement
Particulars Current year % previous year %
sale $           4,32,000.00 100% $     3,72,000.00 100%
cost of goods sold $           2,67,840.00 62% $     2,12,040.00 57%
Gross profit $           1,64,160.00 38% $     1,59,960.00 43%
Selling expenses $              64,800.00 15% $         63,240.00 17%
administrative exp $              73,440.00 17% $         59,520.00 16%
total operating expenses $           1,38,240.00 32% $     1,22,760.00 33%
income from operation $              25,920.00 6% $         37,200.00 10%
income tax expenses $                 8,640.00 2% $         14,880.00 4%
Net income $              17,280.00 4% $         22,320.00 6%

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