Revenue and expense data for Bluestem Company are as follows:

Required:

1)

(a) Prepare a comparative income statement, with vertical analysis, stating each item for both years as a percent of sales. Round your percentages to one decimal place. Enter all amounts as positive numbers. Refer to the Accounts and Amount Descriptions for correct wording of text entries.

(b) Comment upon significant changes disclosed by the comparative income statement.

2) Comment upon significant changes disclosed by the comparative income statement.

There was an (increase/decrease) the cost of goods sold and a 1.7% (increase/decrease) in administrative expenses. However, the most significant of 3.1% in selling expenses offset the 1.8% (increase/decrease) in the cost of goods sold and contributed greatly to the 3.4% (increase/decrease) in net income.

Transcribed Image Text:

Administrative expenses COGS Income tax Sales Selling expense Year 2 37,720 360,000 41,000 820,000 154,160 Year 1 20,300 319,900 32,200 700,000 109,900 Administrative expenses COGS Income tax Sales Selling expense Year 2 37,720 360,000 41,000 820,000 154,160 Year 1 20,300 319,900 32,200 700,000 109,900

Answer rating: 100% (QA)

Requirement 1 Comparative Income statement with vertical analysis BLUESTEM COMPANY Com... View the full answer