The income statements for Federer Sports Apparel for 2019 and 2018 are presented
ID: 2586926 • Letter: T
Question
The income statements for Federer Sports Apparel for 2019 and 2018 are presented below Required Prepare a vertical analysis of the data for 2019 and 2018. (Round your answers to 1 decimal place.) FEDERER SPORTS APPAREL Income Statement For the Years Ended December 31 2019 2018 Amount Amount $ 19,200,000 13,017,600 6,182,400 1,708,800 1,094,400 288,000 1,612,800 1,478,400 537,600 $940,800 $ 15,900,000 7,250,400 8,649,600 1,287,900 1,097,100 0 365,700 5,898,900 2,114,700 $ 3,784,200 Net sales Cost of goods sold Gross profit Operating expenses Depreciation expense Inventory write-down Loss (litigation) Income before tax Income tax expense Net incomeExplanation / Answer
note: in a vertical analysis of income statement we have to present each item as a pecentage of net sales.
for example net sales = (net sales / net sales)*100
cost of goods sold = (cost of goods sold / net sales) *100
operating expenses = (operating expenses / net sales)*100.
the following is the required presentation, along with an extra column to show workings:
2019 2018 working Amount % amount % Net sales $19,200,000 100% $15,900,000 100% (19200000/19200000)*100 & (1590000/1590000)*100 cost of goods sold 13,017,600 67.8% 7,250,400 45.6% (13017600/19200000)*100 &(7250400/15900000)*100 Operatin expenses 1,708,800 8.9% 1,287,900 8.1% (1708800/19200000)*100 & (1287900/15900000)*100 Depreciation expense 1,094,400 5.7% 1,097,100 6.9% (1094400/19200000)*100 & (1097100/15900000)*100 Inventory write down 288,000 1.5% 0 0% (288,000 / 19200000) & (0 / 15900000)*100 Loss (litigation) 1,612,800 8.4% 365,700 2.3% (1612800/19200000)*100 & (365700/15900000) Income before tax 1,478,400 7.7% 5,898,900 37.1% (1478400/19200000)*100 & (5898900/159000000)*100 income tax expense 537,600 2.8% 2,114,700 13.3% (537600/19200000)*100 & (2114700/15900000)*100 net income 940,800 4.9% 3,784,200 23.8% (940,800/19200000)*100 & (3784200/15900000)*100Related Questions
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