Use the Income Statement below for Questions 1 and 2. When preparing a horizonta

Question

Use the Income Statement below for Questions 1 and 2. When preparing a horizontal analysis, what would the percentage of change be for sales?

43.9%
       38.7%
       44.6%
       64.7%

Using the Income Statement from Question 1, a vertical analysis of the Income Statement for 2012 would show a percentage figure for gross margin equal to:

100.0%
       9.54%
       29.46%
       39.0%

Desert View Company Income Statement For the Years Ended March 31 2012 $518,o00 $360,000 $316,000 $220,000 $202,000 $140,000 $152,600 $110,000 $49,400 $30,000 2011 Sales Cost of Goods Sold Gross Margin Operating Expenses Net Income

Explanation / Answer

Question 1. The percentage of change for sales = 518000 - 360000 / 360000 * 100

= 158000 / 360000 * 100

= 43.9 % (approx)

Question 2. A percentage figure for gross margin in year 2012 = Gross margin / sales * 100

= 140000 / 360000 * 100

= 39 % (approx)

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