Required: 1. Prepare an income statement in comparative form, stating each item
ID: 2415061 • Letter: R
Question
Required:
1. Prepare an income statement in comparative form, stating each item for both 2012 and 2011 as a percent of sales. Round percentage amounts to nearest whole percent.
Young Technologies Inc.
Comparative Income Statement
For the Years Ended December 31, 2012 and 2011
2012 Amount
2012 Percent
2011 Amount
2011 Percent
$
%
$
%
%
%
$
%
$
%
%
%
%
%
Total expenses
$
%
$
%
%
%
%
%
%
$
%
2. Comment on the significant changes disclosed by the comparative income statement.
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Hide1. Prepare an income statement in comparative form, stating each item for both 2012 and 2011 as a percent of sales. Round percentage amounts to nearest whole percent.
Young Technologies Inc.
Comparative Income Statement
For the Years Ended December 31, 2012 and 2011
2012 Amount
2012 Percent
2011 Amount
2011 Percent
$
%
$
%
%
%
$
%
$
%
%
%
%
%
Total expenses
$
%
$
%
%
%
%
%
%
$
%
Explanation / Answer
For the Years Ended December 31, 2012 and 2011
2012 Amount
2012 Percent
2011 Amount
2011 Percent
sales
$ 5,00,000
100 %
$ 4,40,000
100%
Cost of good sold
3,25,000
65%
2,42,000
55 %
Gross profit
$ 1,75,000
35 %
$ 198000
45 %
Selling Expenses
70,000
14%
79,200
18 %
Administrative expenses
75,000
15%
70,400
16 %
Total expenses
$ 1,45,000
29 %
$ 1,51,600
34%
Income before Income Tax
30,000
6 %
46,400
11%
Income Tax
10,500
2.1%
16,400
3.72%
Net INCOME
19,500
3.96%
$ 30,000
6.81 %
Cost of good sold has increased in 2012 from 2011 by 10%. As a result of increase on Cost of good sold gross profit decreased in 2012 as compared to 2011. Selling expenses and administrative expenses decreased in 2012. Net profit as a percentage og sale decreased in 2012 as compared to 2011.
For the Years Ended December 31, 2012 and 2011
2012 Amount
2012 Percent
2011 Amount
2011 Percent
sales
$ 5,00,000
100 %
$ 4,40,000
100%
Cost of good sold
3,25,000
65%
2,42,000
55 %
Gross profit
$ 1,75,000
35 %
$ 198000
45 %
Selling Expenses
70,000
14%
79,200
18 %
Administrative expenses
75,000
15%
70,400
16 %
Total expenses
$ 1,45,000
29 %
$ 1,51,600
34%
Income before Income Tax
30,000
6 %
46,400
11%
Income Tax
10,500
2.1%
16,400
3.72%
Net INCOME
19,500
3.96%
$ 30,000
6.81 %
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