Income statement data for Moreno Company for two recent yearsended December 31, are as follows:
Moreno Company
Comparative Income Statement
For the Years Ended December 31, 20--
1
Current Year
Previous Year
2
Sales
$1,120,000.00
$1,000,000.00
3
Cost of goods sold
971,250.00
875,000.00
4
Gross profit
$148,750.00
$125,000.00
5
Selling expenses
$71,250.00
$62,500.00
6
Administrative expenses
56,000.00
50,000.00
7
Total operating expenses
$127,250.00
$112,500.00
8
Income before income tax
$21,500.00
$12,500.00
9
Income tax expense
8,000.00
5,000.00
10
Net income
$13,500.00
$7,500.00
Required: A. Prepare a comparative incomestatement with horizontal analysis for the two-year period,indicating the increase (decrease) for the current year whencompared with the previous year. Use the minus sign to indicate anamount or percent decrease. If required, round percentages to onedecimal place. B. What conclusions can be drawn from the horizontalanalysis?
Prepare a comparative income statement with horizontal analysisfor the two-year period, indicating the increase (decrease) for thecurrent year when compared with the previous year. Use the minussign to indicate an amount or percent decrease. If required, roundpercentages to one decimal place.
Moreno Company
Comparative Income Statement
For the Years Ended December 31, 20--
1
Increase (Decrease)
Increase (Decrease)
2
Current Year
Previous Year
Amount
Percent
3
Sales
$1,120,000.00
$1,000,000.00
4
Cost of goods sold
971,250.00
875,000.00
5
Gross profit
$148,750.00
$125,000.00
6
Selling expenses
$71,250.00
$62,500.00
7
Administrative expenses
56,000.00
50,000.00
8
Total operating expenses
$127,250.00
$112,500.00
9
Income before income tax
$21,500.00
$12,500.00
10
Income tax expense
8,000.00
5,000.00
11
Net income
$13,500.00
$7,500.00
Income statement data for Moreno Company for two recent yearsended December 31, are as follows:
Moreno Company |
Comparative Income Statement |
For the Years Ended December 31, 20-- |
1 | Current Year | Previous Year | |
2 | Sales | $1,120,000.00 | $1,000,000.00 |
3 | Cost of goods sold | 971,250.00 | 875,000.00 |
4 | Gross profit | $148,750.00 | $125,000.00 |
5 | Selling expenses | $71,250.00 | $62,500.00 |
6 | Administrative expenses | 56,000.00 | 50,000.00 |
7 | Total operating expenses | $127,250.00 | $112,500.00 |
8 | Income before income tax | $21,500.00 | $12,500.00 |
9 | Income tax expense | 8,000.00 | 5,000.00 |
10 | Net income | $13,500.00 | $7,500.00 |
| Required: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| A. | Prepare a comparative incomestatement with horizontal analysis for the two-year period,indicating the increase (decrease) for the current year whencompared with the previous year. Use the minus sign to indicate anamount or percent decrease. If required, round percentages to onedecimal place. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| B. | What conclusions can be drawn from the horizontalanalysis? Prepare a comparative income statement with horizontal analysisfor the two-year period, indicating the increase (decrease) for thecurrent year when compared with the previous year. Use the minussign to indicate an amount or percent decrease. If required, roundpercentages to one decimal place.
|
Related questions
Instructions
Income statement data for Moreno Company for two recent yearsended December 31, are as follows:
Moreno Company |
Comparative Income Statement |
For the Years Ended December 31, 20-- |
1 | Current Year | Previous Year | |
2 | Sales | $1,948,800.00 | $1,740,000.00 |
3 | Cost of goods sold | 1,674,750.00 | 1,522,500.00 |
4 | Gross profit | $274,050.00 | $217,500.00 |
5 | Selling expenses | $71,875.00 | $62,500.00 |
6 | Administrative expenses | 51,520.00 | 46,000.00 |
7 | Total operating expenses | $123,395.00 | $108,500.00 |
8 | Income before income tax | $150,655.00 | $109,000.00 |
9 | Income tax expense | 13,398.00 | 8,700.00 |
10 | Net income | $137,257.00 | $100,300.00 |
| Required: | |
| A. | Prepare a comparative incomestatement with horizontal analysis for the two-year period,indicating the increase (decrease) for the current year whencompared with the previous year. Use the minus sign to indicate anamount or percent decrease. If required, round percentages to onedecimal place. |
| B. | What conclusions can be drawnfrom the horizontal analysis? |
X
Income Statement
Prepare a comparative income statement with horizontal analysisfor the two-year period, indicating the increase (decrease) for thecurrent year when compared with the previous year. Use the minussign to indicate an amount or percent decrease. If required, roundpercentages to one decimal place.
Moreno Company |
Comparative Income Statement |
For the Years Ended December 31, 20-- |
1 | Increase (Decrease) | Increase (Decrease) | |||
2 | Current Year | Previous Year | Amount | Percent | |
3 | Sales | $1,948,800.00 | $1,740,000.00 | ||
4 | Cost of goods sold | 1,674,750.00 | 1,522,500.00 | ||
5 | Gross profit | $274,050.00 | $217,500.00 | ||
6 | Selling expenses | $71,875.00 | $62,500.00 | ||
7 | Administrative expenses | 51,520.00 | 46,000.00 | ||
8 | Total operating expenses | $123,395.00 | $108,500.00 | ||
9 | Income before income tax | $150,655.00 | $109,000.00 | ||
10 | Income tax expense | 13,398.00 | 8,700.00 | ||
11 | Net income | $137,257.00 | $100,300.00 |
urgent need it an hour wil rate
The comparative balance sheets of Posner Company, for Years 1 and 2 ended December 31, appear below in condensed form.
| 1 | Year 2 | Year 1 | |
| 2 | Cash | $53,000.00 | $50,000.00 |
| 3 | Accounts Receivable (net) | 37,000.00 | 48,000.00 |
| 4 | Inventories | 108,500.00 | 100,000.00 |
| 5 | Investments | 70,000.00 | |
| 6 | Equipment | 573,200.00 | 450,000.00 |
| 7 | Accumulated Depreciation-Equipment | (142,000.00) | (176,000.00) |
| 8 | $629,700.00 | $542,000.00 | |
| 9 | Accounts Payable | $62,500.00 | $43,800.00 |
| 10 | Bonds Payable, Due Year 2 | 100,000.00 | |
| 11 | Common Stock, $10 par | 325,000.00 | 285,000.00 |
| 12 | Paid-In Capital in Excess of ParâCommon Stock | 80,000.00 | 55,000.00 |
| 13 | Retained Earnings | 162,200.00 | 58,200.00 |
| 14 | $629,700.00 | $542,000.00 |
The income statement for the current year is as follows:
| 1 | Sales | $625,700.00 | |
| 2 | Cost of merchandise sold | 340,000.00 | |
| 3 | Gross profit | $285,700.00 | |
| 4 | Operating expenses: | ||
| 5 | Depreciation expense | $26,000.00 | |
| 6 | Other operating expenses | 68,000.00 | 94,000.00 |
| 7 | Income from operations | $191,700.00 | |
| 8 | Other revenue and expense: | ||
| 9 | Gain on sale of investment | $4,000.00 | |
| 10 | Interest expense | (6,000.00) | (2,000.00) |
| 11 | Income before income tax | $189,700.00 | |
| 12 | Income tax | 60,700.00 | |
| 13 | Net income | $129,000.00 |
Additional data for the current year are as follows:
| (a) | Fully depreciated equipment costing $60,000 was scrapped, no salvage, and new equipment was purchased for $183,200. |
| (b) | Bonds payable for $100,000 were retired by payment at their face amount. |
| (c) | 5,000 shares of common stock were issued at $13 for cash. |
| (d) | Cash dividends declared and paid, $25,000. |
Required:
| Prepare a statement of cash flows using the indirect method of reporting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. |
Labels and Amount Descriptions
| Labels | |
| For the Year Ended December 31, Year 2 | |
| Amount Descriptions | |
| Cash from sale of common stock | |
| Cash from sale of investments | |
| Cash paid for dividends | |
| Cash paid for purchase of equipment | |
| Cash paid to retire bonds payable | |
| Decrease in accounts payable | |
| Decrease in accounts receivable | |
| Decrease in cash | |
| Decrease in inventories | |
| Depreciation | |
| Gain on sale of investment | |
| Increase in accounts payable | |
| Increase in accounts receivable | |
| Increase in cash | |
| Increase in inventories | |
| Loss on sale of investment | |
| Net cash flow from financing activities | |
| Net cash flow from investing activities | |
| Net cash flow from operating activities | |
| Net cash flow used for financing activities | |
| Net cash flow used for investing activities | |
| Net cash flow used for operating activities | |
| Net income | |
| Net loss |
Statement of Cash Flows
Prepare a statement of cash flows using the indirect method of reporting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.
| Posner Company |
| Statement of Cash Flows |
| 1 | Cash flows from operating activities: | ||
| 2 | |||
| 3 | Adjustments to reconcile net income to net cash flow from operating activities: | ||
| 4 | |||
| 5 | |||
| 6 | Changes in current operating assets and liabilities: | ||
| 7 | |||
| 8 | |||
| 9 | |||
| 10 | |||
| 11 | Cash flows from investing activities: | ||
| 12 | |||
| 13 | |||
| 14 | |||
| 15 | Cash flows from financing activities: | ||
| 16 | |||
| 17 | |||
| 18 | |||
| 19 | |||
| 20 | |||
| 21 | Cash at the beginning of the year | ||
| 22 | Cash at the end of the year |
