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Item 1

Item 1 1.66 points

Income statements for Perez Company for 2018 and 2019 follow:

PEREZ COMPANY Income Statements
	2019				2018
Sales	$	201,600			$	181,600
Cost of goods sold		142,100				120,100
Selling expenses		21,200				19,200
Administrative expenses		12,300				14,300
Interest expense		3,800				5,800
Total expenses	$	179,400			$	159,400
Income before taxes		22,200				22,200
Income taxes expense		5,300				3,800
Net income	$	16,900			$	18,400

Required

1. Perform a horizontal analysis, showing the percentage change in each income statement component between 2018 and 2019.

2. Perform a vertical analysis, showing each income statement component as a percentage of sales for each year.

Complete this question by entering your answers in the tabs below.

• Required A
• Required B

Perform a horizontal analysis, showing the percentage change in each income statement component between 2018 and 2019. (Negative answers should be indicated by a minus sign. Round your answers to 1 decimal place. (i.e., .234 should be entered as 23.4).)

PEREZ COMPANY
Horizontal Analysis of Income Statements
	Percentage Change over 2018
Sales		%
Cost of goods sold
Selling expenses
Administrative expenses
Interest expense
Total expenses
Income before taxes
Income taxes expense
Net income (loss)		%

Perform a vertical analysis, showing each income statement component as a percentage of sales for each year. (Percentages may not add exactly due to rounding. Round your answers to 1 decimal place. (i.e., .234 should be entered as 23.4).)

PEREZ COMPANY
Vertical Analysis of Income Statements
	Percentage of Sales 2019		Percentage of Sales 2018
Sales		%		%
Cost of goods sold
Selling expenses
Administrative expenses
Interest expense
Total expenses
Income before taxes
Income taxes expense
Net income		%		%

Selected financial information for Fanning Company for 2019 follows:

Sales	$	2,050,000
Cost of goods sold		1,435,000
Merchandise inventory
Beginning of year		156,000
End of year		192,000

Required

Assuming that the merchandise inventory buildup was relatively constant, how many times did

Merchandise inventory turnover

times