E14-2 Operating data for Gallup Corporation are presented below. 2012 2011 Sales

Question

E14-2

Operating data for Gallup Corporation are presented below.
2012 2011
Sales $750,000 $600,000
Cost of goods sold 465,000 390,000
Selling expenses 120,000 72,000
Administrative expenses 60,000 54,000
Income tax expense 33,000 24,000
Net income 72,000 60,000


Complete the schedule showing a vertical analysis for 2012 and 2011. (List amounts from largest to smallest e.g. 10, 5, 3, 2. Round percentages to 1 decimal place, e.g. 10.5. Enter all amounts as positive amounts and subtract where necessary.)

GALLUP CORPORATION
Condensed Income Statements
For the Years Ended December 31

2012
2011

Amount
Percentage
Amount
Percentage

Income tax expenseAdministrative expensesIncome before income taxesSalesCost of goods soldGross profitSelling expensesTotal operating expensesNet income $ % $ %
Selling expensesNet incomeTotal operating expensesCost of goods soldSalesIncome tax expenseIncome before income taxesGross profitAdministrative expenses
%

%

Selling expensesSalesAdministrative expensesTotal operating expensesIncome before income taxesIncome tax expenseNet incomeGross profitCost of goods sold
%

%

Income before income taxesNet incomeIncome tax expenseSalesSelling expensesCost of goods soldTotal operating expensesAdministrative expensesGross profit % %
Cost of goods soldIncome before income taxesSelling expensesGross profitIncome tax expenseNet incomeAdministrative expensesSalesTotal operating expenses
%

%

Gross profitNet incomeTotal operating expensesIncome before income taxesIncome tax expenseSelling expensesCost of goods soldAdministrative expensesSales
%

%

Administrative expensesIncome tax expenseSelling expensesSalesNet incomeIncome before income taxesCost of goods soldGross profitTotal operating expenses % %
SalesTotal operating expensesCost of goods soldIncome tax expenseGross profitIncome before income taxesSelling expensesAdministrative expensesNet income
%

%

Administrative expensesIncome before income taxesTotal operating expensesSelling expensesIncome tax expenseNet incomeSalesCost of goods soldGross profit $
%
$

Explanation / Answer

2009 2008 Amount Percent Amount Percent Sales $750,000 100 $600,000 100 Cost of goods sold 465,000 62 390,000 65 Gross Margin 285,000 38 210,000 35 Selling expenses 120,000 16 72,000 12 Administrative expenses 60,000 8 54,000 9 Operating Income 105,000 14 84,000 14 Income tax expense 33,000 4.4 24,000 4 Net income 72,000 9.6 60,000 10

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