Exercise 14-2 Operating data for Navarro Corporation are presented below. 2017 2

Question

Exercise 14-2 Operating data for Navarro Corporation are presented below. 2017 2016 Net sales Cost of goods sold Selling expenses Administrative expenses Income tax expense Net income 745,000 460,000 115,000 55,000 28,000 87,000 $595,000 385,000 67,000 49,000 19,000 75,000 Prepare a schedule showing a vertical analysis for 2017 and 2016" (Round answers to 1 decimal place, eg. 48.5%.) NAVARRO CORPORATION For the Years Ended December 31 2017 2016 Percent Amount Amount 745,000 460,000 285,000 115,000 Percent $595,000 % 385,000 % 210,000 9% 67,000 Net sales Cost of goods sold Gross profit Selling expenses

Explanation / Answer

Navarro corporation

condensed income statements

for the year ended december 31

amount percent (workings in brackets) amount percent (workings in brackets) net sales 745,000 (745,000/745,000*100=>100%) 595,000 (595,000/595,000*100)=>100% cost of goods sold 460,000 (460,000/745,000*100)=>61.7% 385,000 (385,000/595,000*100)=>64.7% gross profit 285,000 (285,000/745,000*100)=>38.3% 210,000 (210,000/595,000*100)=>35.2% selling expenses 115,000 (115,000/745,000*100)=>15.4% 67,000 (67,000/595,000*100)=>11.3% administrative expenses 55,000 (55,000/745,000*100)=>7.4% 49,000 (49,000/595,000*100)=>8.2% total operating expenses 170,000 (170,000/745,000*100)=>22.8% 116,000 (116,000/595,000*100)=>19.5% income before income taxes 115,000 (115,000/745,000*100)=>15.4% 94,000 (94,000/595,000*100)=>15.8% income taxes expense 28,000 (28,000/745,000*100)=>3.8% 19,000 (19,000/595,000*100)=>3.2% net income 87,000 (87,000/745,000*100)=>11.7% 75,000 (75,000/595,000*100)=>12.6%

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