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The following items were taken from the financial statements ofTilden, Inc., over a three-year period:

Item Year 3 Year 2 Year 1
Sales $360,000 $335,000 $290,000
Cost of goods sold 225,000 205,000 185,000
Gross profit $135,000 $130,000 $105,000

Compute the following for each of the above time periods.

a. The amount and percentage change from Year 2 to Year 3.

b. The amount and percentage change from Year 1 to Year 2.

If required, round your answers to one decimal place.

Item Year 3 Year 2
$ Percent $ Percent
Sales $ % $ %
Cost of Goods Sold % %
Gross Profit $ % $ %

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Jean Keeling
Jean KeelingLv2
28 Sep 2019

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The following items were taken from the financial statements ofTilden, Inc., over a three-year period:

Item Year 3 Year 2 Year 1
Sales $360,000 $335,000 $290,000
Cost of goods sold 225,000 205,000 185,000
Gross profit $135,000 $130,000 $105,000

Compute the following for each of the above time periods.

a. The amount and percentage change from Year 2 to Year 3.

b. The amount and percentage change from Year 1 to Year 2.

If required, round your answers to one decimal place.

Item Year 3 Year 2
$ Percent $ Percent
Sales $ % $ %
Cost of Goods Sold % %
Gross Profit $ % $ %

Vertical Analysis of Income Statement Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Current Year Previous Year Sales $620,000 $539,000 Cost of goods sold 353,400 274,890 Selling expenses 105,400 107,800 Administrative expenses 117,800 91,630 Income tax expense 18,600 26,950 a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. If required, round percentages to one decimal place. Enter all amounts as positive numbers. Innovation Quarter Inc. Comparative Income Statement For the Years Ended December 31 Current year Amount Current year Percent Previous year Amount Previous year Percent Sales $620,000 % $539,000 % Cost of goods sold 353,400 % 274,890 % Gross profit $ % $ % Selling expenses 105,400 % 107,800 % Administrative expenses 117,800 % 91,630 % Total operating expenses $ % $ % Income from operations % % Income tax expense 18,600 % 26,950 % Net income $ % $ % b. The vertical analysis indicates that the cost of goods sold as a percent of sales by 6 percentage points, while selling expenses by 3 percentage points, and administrative expenses by 2 percentage points. Thus, net income as a percent of sales by 3 percentage points.

Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows:

Current Year Previous Year
Sales $381,000 $328,000
Cost of goods sold 220,980 173,840
Selling expenses 64,770 62,320
Administrative expenses 68,580 55,760
Income tax expense 11,430 13,120

a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. If required, round percentages to one decimal place. Enter all amounts as positive numbers.

Innovation Quarter Inc.
Comparative Income Statement
For the Years Ended December 31
Current year Amount Current year Percent Previous year Amount Previous year Percent
Sales $381,000 % $328,000 %
Cost of goods sold 220,980 % 173,840 %
$ % $ %
Selling expenses 64,770 % 62,320 %
Administrative expenses 68,580 % 55,760 %
$ % $ %
% %
Income tax expense 11,430 % 13,120 %
$ % $ %

b. The vertical analysis indicates that the cost of goods sold as a percent of sales by 5 percentage points, while selling expenses by 2 percentage points, and administrative expenses by 1 percentage points. Thus, net income as a percent of sales by 3 percentage points.

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