Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent years...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent years ended December 31 are as follows: Current Year Previous Year Sales $2,240,000 $2,000,000 Cost of goods sold (1,925,000) (1,750,000) Gross profit $315,000 $250,000 Selling expenses $(152,500) $(125,000) Administrative expenses (118,000) (100,000) Total operating expenses $(270,500) $(225,000) Income before income tax expense $44,500 $25,000 Income tax expense (17,800) (10,000) Net income $26,700 $15,000 a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. If required, round to one decimal place. Winthrop Company Comparative Income Statement For the Years Ended December 31 Current Previous Increase Increase year Amount year Amount (Decrease) Amount (Decrease) Percent Sales $2,240,000 $2,000,000 Cost of goods sold (1,925,000) (1,750,000) Gross profit $315,000 $250,000 Selling expenses $(152,500) ৪(125,000) Administrative expenses (118,000) (100,000) Total operating expenses $(270,500) ६(225,000) Income before income tax expense $44,500 $25,000 Income tax expense (17,800) (10,000) Net income $26,700 $15,000 in sales and a b. The net income for Winthrop Company increased between years. This increase was the combined result of an In cost of goods sold. The cost of goods sold increased at a rate than E percentage the increase in sales, thus causing the percentage increase in gross profit to be than the percentage increase in sales. Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent years ended December 31 are as follows: Current Year Previous Year Sales $2,240,000 $2,000,000 Cost of goods sold (1,925,000) (1,750,000) Gross profit $315,000 $250,000 Selling expenses $(152,500) $(125,000) Administrative expenses (118,000) (100,000) Total operating expenses $(270,500) $(225,000) Income before income tax expense $44,500 $25,000 Income tax expense (17,800) (10,000) Net income $26,700 $15,000 a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. If required, round to one decimal place. Winthrop Company Comparative Income Statement For the Years Ended December 31 Current Previous Increase Increase year Amount year Amount (Decrease) Amount (Decrease) Percent Sales $2,240,000 $2,000,000 Cost of goods sold (1,925,000) (1,750,000) Gross profit $315,000 $250,000 Selling expenses $(152,500) ৪(125,000) Administrative expenses (118,000) (100,000) Total operating expenses $(270,500) ६(225,000) Income before income tax expense $44,500 $25,000 Income tax expense (17,800) (10,000) Net income $26,700 $15,000 in sales and a b. The net income for Winthrop Company increased between years. This increase was the combined result of an In cost of goods sold. The cost of goods sold increased at a rate than E percentage the increase in sales, thus causing the percentage increase in gross profit to be than the percentage increase in sales.
Expert Answer:
Answer rating: 100% (QA)
WINTHROP COMPANY Comparative Income Statement For the Years Ended December 31 Current year Previous ... View the full answer
Related Book For
Accounting Principles
ISBN: 978-1119048473
7th Canadian Edition Volume 2
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak
Posted Date:
Students also viewed these accounting questions
-
A horizontal and vertical analysis of the income statement for a service company providing consulting services is shown below: SERVICE CORPORATION Horizontal Income Statement Year Ended December 31...
-
A horizontal and vertical analysis of the income statement for a retail company selling a wide variety of general merchandise is shown below: Instructions (a) How effectively has the company...
-
A horizontal and vertical analysis of the income statement for a retail company selling a wide variety of general merchandise is shown below. Instructions (a) How effectively has the company...
-
Solve the linear equation with the x-intercept method. Check your answer. Approximate the solution to the nearest thousandth whenever appropriate. 2x = -(3x)
-
Referring to Exercise 8.11a, assume that the population standard deviation equals 33. How large a random sample of public owner-controlled companies is needed to make us? In exercise Suppose that a...
-
Fixit, Inc. operates 20 injection molding machines in the production of tool boxes of four different sizes, named the Apprentice, the Handyman, the Journeyman, and the Professional. Classify each of...
-
What are the major forms of a business? Why would there need to be any difference between them? What are some advantages and disadvantages to each form?
-
Reece Financial Services Co., which specializes in appliance repair services, is owned and operated by Joni Reece. Reece Financial Services Co.'s accounting clerk prepared the following unadjusted...
-
Explain the two different ways to measure the real interest rate? Why can the nominal and real interest rates move in different directions?
-
Ayayai Hotels Ltd. (AHL) is a small boutique hotel that provides 44 suites that can be rented by the day, week, or month. Food service is available through room service as well. In addition, there...
-
Conduct an up-to-date PESTLE analysis for Nestle with references included.
-
Graphing simply supply and demand upon a linear, one-dimensional graph represent that the slope remains constant at each point of the curve. The linear demand curve shows that at each point of the...
-
Project A is selected because it has a low cost of $2,000, it gives a rate of return of 8%, Project B was not selected, it needs a higher cost of $5,000, it is projected to give a rate of return of...
-
Anand runs an airport coffee shop. He sells yogurt for $10 and granola for $3. Customers are only interested in buying one yogurt, one granola, or both. In a typical hour, hell have one person buying...
-
Discuss how the bullwhip effect can be reduced in the supply chain Discuss the steps required to improve supply chain resilience Describe the process involved in developing a risk management...
-
Partnership between the PepsiCo Foundation and Water Aid provides safe water access to communities in Ethiopia The PepsiCo Foundation, the philanthropic arm of food and beverage giant PepsiCo, has...
-
You are interested in purchasing a residential apartment block as a long-term investment. You have identified two identical apartment blocks in two different cities: City A and City B. The following...
-
What types of inventory issues Starbucks might reflect upon at the end of each year? The mission of Starbucks is to inspire and nurture the human spiritone person, one cup, and one neighborhood at a...
-
The trial balances of two proprietorships on January 1, 2017, follow: Domic and Dasilva decide to form a partnership on January 1 and agree noncash assets that they are each contributing: All of the...
-
Presented below is the partial bond premium amortization schedule for Gomez Corp. Gomez uses the effective-interest method of amortization. (a) Prepare the journal entry to record the payment of...
-
Elite Electronics issues a $450,000, 10-year, 7.5% mortgage note payable on December 31, 2017. The terms of the note provide for semi-annual fixed principal payments of $22,500, plus interest, on...
-
1. Describe the bases of power held by Dr. Jamie Thompson. Describe the bases of power held by Dr. Elizabeth Clarke. 2. What activities and people have contributed to Jaime Thompsons power? What...
-
What is the current in the wire in Figure Q22.1? 1.0 VR + 1.0-1.0V + FIGURE Q22.1
-
Electroconvulsive therapy is a last-line treatment for certain mental disorders. In this treatment, an electric current is passed directly through the brain, inducing seizures. The total charge that...
Study smarter with the SolutionInn App