Question
In: Accounting
Preparing Common-Size Income Statements by Using Base Period Horizontal Analysis Scherer Company provided the following income...
Preparing Common-Size Income Statements by Using Base Period Horizontal Analysis
Scherer Company provided the following income statements for its first 3 years of operation:
| Scherer Company Income Statements Years of Operation |
|||
| Year 1 | Year 2 | Year 3 | |
| Net sales | $1,010,000 | $1,131,200 | $1,353,400 |
| Less: Cost of goods sold | (293,000) | (314,000) | (362,000) |
| Gross margin | $717,000 | $817,200 | $991,400 |
| Less: | |||
| Operating expenses | (424,000) | (490,000) | (595,500) |
| Income taxes | (110,800) | (120,200) | (135,000) |
| Net income | $182,200 | $207,000 | $260,900 |
repare common-size income statements by using Year 1 as the base period. (Note: Enter all amounts as positive numbers, except for a net loss. Enter net loss as a negative number, if applicable. Round answers to the nearest whole percentage.)
| Scherer Company | ||||||
| Common-Size Income Statements | ||||||
| Years of Operation | ||||||
| Year 1 | Year 1 | Year 2 | Year 2 | Year 3 | Year 3 | |
| Dollars | Percentage | Dollars | Percentage | Dollars | Percentage | |
| Net sales | $1,010,000 | % | 1,131,200 | % | $1,353,400 | % |
| Less: Cost of goods sold | (293,000) | (314,000) | (362,000) | |||
| Gross margin | $717,000 | $817,200 | $991,400 | |||
| Less: | ||||||
| Operating expenses | (424,000) | (490,000) | (595,500) | |||
| Income taxes | (110,800) | (120,200) | (135,000) | |||
| Net income | $182,200 | $207,000 | $260,900 | |||
Solutions
Expert Solution
| Ans. | SCHERER COMPANY | |||||||
| Common Size Income Statements | ||||||||
| Years of Operation | ||||||||
| Year 1 | Year 1 | Year 2 | Year 2 | Year 3 | Year 3 | |||
| Dollars | Percentage | Dollars | Percentage | Dollars | Percentage | |||
| Net sales | $1,010,000 | 100.00% | $1,131,200 | 100.00% | $1,353,400 | 100.00% | ||
| Cost of goods sold | -$293,000 | -29.01% | -$314,000 | -27.76% | -$362,000 | -26.75% | ||
| Gross profit | $717,000 | 70.99% | $817,200 | 72.24% | $991,400 | 73.25% | ||
| Less: | ||||||||
| Operating expenses | -$424,000 | -41.98% | -$490,000 | -43.32% | -$595,500 | -44.00% | ||
| Income taxes | -$110,800 | -10.97% | -$120,200 | -10.63% | -$135,000 | -9.97% | ||
| Net income | $182,200 | 18.04% | $207,000 | 18.30% | $260,900 | 19.28% | ||
| *In a common size income statement, all precentages are calculated on the base of sales. | ||||||||
| Amount is percentage for year 1 = Particular amount of year 1 / Sales * 100 | ||||||||
| Amount is percentage for year 2 = Particular amount of year 2 / Sales * 100 | ||||||||
| Amount is percentage for year 3 = Particular amount of year 3 / Sales * 100 | ||||||||
ekkarill92 answered 1 year agoRelated Solutions
Preparing Income Statements by Using Net Sales as the Base: Vertical Analysislt Jasmine Company provided the...
Preparing Income Statements by Using Net Sales as the Base:
Vertical Analysislt Jasmine Company provided the following income
statements for its first 3 years of operation:
Year 1 Year 2 Year 3
Net sales $5,000,000 $4,500,000 $4,000,000
Less: Cost of goods sold (3,000,000) (3,250,000) (3,600,000)
Gross margin $2,000,000 $1,250,000 $400,000
Less: Operating expenses (1,420,000) (800,000) (165,000)
Income taxes (232,000) (180,000) (134,000)
Net income $348,000 $270,000 $101,000
Required: Prepare common-size income statements by using net
sales as the base. Round answers...
Common-Size Income Statements and Horizontal Analysis Income statements for Mariners Corp. for the past two years...
Common-Size Income Statements and Horizontal Analysis
Income statements for Mariners Corp. for the past two years are
as follows:
(amounts in thousands
of dollars)
2017
2016
Sales revenue
$60,000
$50,000
Cost of goods sold
42,000
30,000
Gross profit
$18,000
$20,000
Selling and administrative expense
9,000
5,000
Operating income
$9,000
$15,000
Interest expense
2,000
2,000
Income before tax
$7,000
$13,000
Income tax expense
2,000
4,000
Net income
$5,000
$9,000
Required:
1. Using the format in Example 13-5, prepare
common-size comparative income...
Common-Size Income Statements and Horizontal Analysis Income statements for Mariners Corp. for the past two years...
Common-Size Income Statements and Horizontal Analysis
Income statements for Mariners Corp. for the past two years are
as follows:
(amounts in thousands
of dollars)
2017
2016
Sales revenue
$60,000
$50,000
Cost of goods sold
42,000
30,000
Gross profit
$18,000
$20,000
Selling and administrative expense
9,000
5,000
Operating income
$9,000
$15,000
Interest expense
2,000
2,000
Income before tax
$7,000
$13,000
Income tax expense
2,000
4,000
Net income
$5,000
$9,000
Required:
1. Using the format in Example 13-5, prepare
common-size comparative income...
Common-Size Income Statements and Horizontal Analysis Income statements for Mariners Corp. for the past two years...
Common-Size Income Statements and Horizontal Analysis
Income statements for Mariners Corp. for the past two years are
as follows:
(amounts in thousands
of dollars)
2017
2016
Sales revenue
$60,000
$50,000
Cost of goods sold
42,000
30,000
Gross profit
$18,000
$20,000
Selling and administrative expense
9,000
5,000
Operating income
$9,000
$15,000
Interest expense
2,000
2,000
Income before tax
$7,000
$13,000
Income tax expense
2,000
4,000
Net income
$5,000
$9,000
Required:
1. Using the format in Example 13-5, prepare
common-size comparative income...
Perform a horizontal, common-size analysis of the balance sheet items, using 2017 as the base year...
Perform a horizontal, common-size analysis of the balance sheet
items, using 2017 as the base year (meaning each line item for 2017
is 100%). Also include a horizontal analysis of sales and net
income.
Balance Sheet
April 30
(in thousands of dollars)
2019
2018
2017
Assets:
Current assets
$ 1,700
$1,120
$1,544
Plant and equipment (net)
8,110
7,830
5,404
Other assets
1,004
695
772
Total assets
$10,814
$9,645
$7,720
Liabilities and Stockholders' Equity:
Current liabilities
$ 950
$ 880
$ 772
Long-term liabilities...
Problem 3-18 Common-Size and Common-Base-Year Financial Statements In addition to common-size financial statements, common-base-year financial statements...
Problem 3-18 Common-Size and Common-Base-Year Financial
Statements
In addition to common-size financial statements,
common-base-year financial statements are often used. Common-base
year financial statements are constructed by dividing the
current-year account value by base-year account value. Thus, the
result shows the growth rate in the account.
Prepare the common-size balance sheet and common-base-year balance
sheet for the company. Use 2016 as the base-year. (Do not
round intermediate calculations. Enter all common-size answers as a
percent. Round your common-size answers to...
Common-size financial statements. Prepare common-size income statements for Walmart and Starbucks using the January 2015 and...
Common-size financial statements. Prepare common-size
income statements for Walmart and Starbucks using the January 2015
and September 2014 information in the popup window:
LOADING...
. Which company is doing a better job of getting sales dollars
to net income? Where is the one company having an advantage over
the other company in turning revenue into net income?
Complete the table below: (Round to two decimal places. Net
income to three decimal places.)
Abbreviated Income Statements ($ in
Millions)
Company
Walmart,...
Common-size financial statements. Prepare common-size income statements for Walmart and Starbucks using the January 2015 and...
Common-size financial statements. Prepare common-size income
statements for Walmart and Starbucks using the January 2015 and
September 2014 information in the popup window: Which company is
doing a better job of getting sales dollars to net income? Where
is the one company having an advantage over the other company in
turning revenue into net income?
Complete the table below: (Round to two decimal places. Net
income to three decimal places.)
Abbreviated Income Statements ($ in
Millions)
Company
Walmart, Inc.
Starbucks...
Common-size financial statements. Prepare common-size income statements for Walmart and Starbucks using the January 2015 and...
Common-size financial statements. Prepare common-size income
statements for Walmart and Starbucks using the January 2015 and
September 2014 information in the popup window:
LOADING...
. Which company is doing a better job of getting sales dollars
to net income? Where is the one company having an advantage over
the other company in turning revenue into net income?
Complete the table below: (Round to two decimal places. Net
income to three decimal places.)
Abbreviated Income Statements ($ in
Millions)
Company
Walmart,...
Prepare a horizontal analysis of the income statement data for Delaney Corporation, using 2016 as a base.
*Exercise 9-6 Here are the comparative income statements of Delaney Corporation, DELANEY CORPORATION Comparative Income Statements For the Years Ended December 31 20172016Net sales $598,000$500,000Cost of goods sold 477,000420,000Gross Profit 121,00080,000Operating expenses 80,00044,000Net income $ 41,000$36,000 Prepare a horizontal analysis of the income statement data for Delaney Corporation, using 2016 as a base. (If amount and percentage are a decrease show the numbers as negative, e.g. -55, 000, -20% or (55,000), (20%). Round percentages to 1 decimal place, e.g. 12.1%.) Prepare a vertical analysis of the income statement...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- A cubic polynomial is of the form: f(x) = Ax^3 + Bx^2 + Cx + D...
- In Java The Problem In his book Irreligion, the mathematician John Allen Paulos tells an amusing...
- (EAC) Brandy's Place has decided to purchase a new branding machine. Brandy will buy one of...
- You deposit $175,000 in a savings account. The APR (Annual Percentage Rate) is 6%. Calculate the...
- AN OUNCE OF CURE QUESTIONS: QUESTION 1 Connie, the 15-year old protagonist, in Oates's story is...
- Compare and Contrast tacit knowledge and explicit knowledge. (and use real-life examples) Explain why organizational...
- Decision Structures Calorie Calculator Assignment Overview This assignment will give you practice with numerical calculations, simple...
ADVERTISEMENT