please show example through Excel Vertical Analysis of Income Statement For 2014

Question

please show example through Excel

Vertical Analysis of Income Statement

For 2014, Othere Technology Company initiated a sales promotion campaign that included the expenditure of an additional $15,000 for advertising. At the end of the year, George Wallace, the president, is presented with the following condensed comparative income statement:

Required:

1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to net sales for each of the years. Enter percentages as whole numbers. Enter all amounts as positive numbers.

Othere Technology Company

Comparative Income Statement

For the Years Ended December 31, 2014 and 2013

2014 Amount

2014 Percent

2013 Amount

2013 Percent

Sales

$ 529,240

  %

$ 455,510

  %

Sales returns and allowances

5,240

  %

4,510

  %

Net sales

$ 524,000

  %

$ 451,000

  %

Cost of goods sold

246,280

  %

230,010

  %

Gross profit

$ 277,720

  %

$ 220,990

  %

Selling expenses

$ 104,800

  %

$ 85,690

  %

Administrative expenses

52,400

  %

54,120

  %

Total operating expenses

$ 167,680

  %

$ 139,810

  %

Income from operations

$ 110,040

  %

$ 81,180

  %

Other income

26,200

  %

13,530

  %

Income before income tax

$ 136,240

  %

$ 94,710

  %

Income tax expense

52,400

  %

36,080

  %

Net income

$ 83,840

  %

$ 58,630

  %

Othere Technology Company
Comparative Income Statement
For the Years Ended December 31, 2014 and 2013 2014 2013 Sales $529,240 $455,510 Sales returns and allowances 5,240 4,510 Net sales $524,000 $451,000 Cost of goods sold 246,280 230,010 Gross profit $277,720 $220,990 Selling expenses $104,800 $85,690 Administrative expenses 52,400 54,120 Total operating expenses $167,680 $139,810 Income from operations $110,040 $81,180 Other income 26,200 13,530 Income before income tax $136,240 $94,710 Income tax expense 52,400 36,080 Net income $83,840 $58,630

Explanation / Answer

Comparative income statement for the two-year period

percentage amount = amount/net sales*100

2014 2014 Percent 2013 2013 Percent Sales 529240 101% 455510 1% Sales returns and allowances 5240 1% 4510 1% Net sales 524000 100% 451000 100% Cost of goods sold 246280 47% 230010 5% Gross profit 277720 53% 220990 49% Selling expenses 104800 20% 85690 19% Administrative expenses 52400 10% 54120 12% Total operating expenses 167680 32% 139810 31% Income from operations 110040 21% 81180 18% Other income 26200 5% 13530 3% Income before income tax 136240 26% 94710 21% Income tax expense 52400 10% 36080 8% Net income 83840 16% 58630 13%

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