Fishing Experiences Comparative Income Statement For the Years Ended Decemeber 3
ID: 2391175 • Letter: F
Question
Fishing Experiences Comparative
Income Statement
For the Years Ended Decemeber 31, 2014 and 2013
20Y6 Percent 20Y5 Percent
Sales 200,000 ? 1 ,000,000 ?
Costs of goods sold -624,000 ? -558,000 ?
Gross profit 576,000 ? 442,000 ?
Selling expenses -120,000 ? -75,000 ?
Administrative expenses -50,000 ? -50,000 ?
Total operating expenses -170,000 ? -125,000 ?
Income from operations 406,000 ? 317,000 ?
Other income 30,000 ? 30,000 ?
Income before income tax 436,000 ? 347,000 ?
Income tax expenses -100,000 ? -90,000 ?
Net income 336,000 ? 257,000 ?
Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to sales for each of the years. Round your percentages to one decimal place. Enter all amounts as positive numbers.
To the extent the data permit, comment on the significant relationships revealed by the vertical analysis prepared in (1).
Explanation / Answer
Fishing Experiences
Comparative Income Statement
For the Years Ended December 31, 2014 and 2013
Sales
1,200,000
100 %
1,000,000
100 %
Cost of goods sold
624,000
52 %
558,000
55.8 %
Gross profit
576,000
48 %
442,000
44.2 %
Selling expenses
120,000
10 %
75,000
7.5 %
Administrative expenses
50,000
4.2 %
50,000
5 %
Total operating expenses
170,000
14.2 %
125,000
12.5 %
Income from operations
406,000
33.8 %
317,000
31.7 %
Other income
30,000
2.5 %
30,000
3 %
Income before income tax
436,000
36.3 %
347,000
34.7 %
Income tax expense
100,000
8.3 %
90,000
9 %
Net income
336,000
28 %
257,000
25.7 %
Fishing Experiences
Comparative Income Statement
For the Years Ended December 31, 2014 and 2013
Sales
1,200,000
100 %
1,000,000
100 %
Cost of goods sold
624,000
52 %
558,000
55.8 %
Gross profit
576,000
48 %
442,000
44.2 %
Selling expenses
120,000
10 %
75,000
7.5 %
Administrative expenses
50,000
4.2 %
50,000
5 %
Total operating expenses
170,000
14.2 %
125,000
12.5 %
Income from operations
406,000
33.8 %
317,000
31.7 %
Other income
30,000
2.5 %
30,000
3 %
Income before income tax
436,000
36.3 %
347,000
34.7 %
Income tax expense
100,000
8.3 %
90,000
9 %
Net income
336,000
28 %
257,000
25.7 %
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