Problem 1. Common-size percentages are often used to compare the statements of companies of unequal size....
| Problem | ||||||||||||||
| 1. | Common-size percentages are often used to compare the statements of companies of unequal size. The condensed income statements of Companies A and B are given below. Enter in the spaces provided the amounts expressed in common-size percentages. | |||||||||||||
| Company A and Company B | ||||||||||||||
| Income Statements for Year Ended December 31, 2007 | ||||||||||||||
| Dollar Amounts | Common-Size Percentages | |||||||||||||
| Company A | Company B | Company A | Company B | |||||||||||
| Sales | $450,000 | $525,000 | ||||||||||||
| Cost of goods sold | 261,000 | 210,000 | ||||||||||||
| Gross margin | $189,000 | $315,000 | ||||||||||||
| Selling expenses | $81,000 | $89,250 | ||||||||||||
| Administrative expenses | 45,000 | 52,500 | ||||||||||||
| Total operating expenses | $126,000 | $141,750 | ||||||||||||
| Income | $63,000 | $173,250 | ||||||||||||
| 2. | After expressing the amounts of the income statements in common-size percentages, examine them and name the company that operated more efficiently. | |||||||||||||
Homework Answers
| 1 | Common-Size Percentages | |||||
| Company A | Company B | Company A | Company B | |||
| Sales | $450,000 | $525,000 | 100.00% | 100.00% | ||
| Cost of goods sold | $261,000 | $210,000 | 58.00% | 40.00% | ||
| Gross margin | $189,000 | $315,000 | 42.00% | 60.00% | ||
| Selling expenses | $81,000 | $89,250 | 18.00% | 17.00% | ||
| Administrative expenses | $45,000 | $52,500 | 10.00% | 10.00% | ||
| Total operating expenses | $126,000 | $141,750 | 28.00% | 27.00% | ||
| Income | $63,000 | $173,250 | 14.00% | 33.00% | ||
| 2 | Company B operated more efficiently compare to Company A. Company B earned 33% | |||||
| of operating income compared to company A 14% | ||||||
Add Answer to:
Problem
1.
Common-size percentages are often used
to compare the statements of companies of unequal size....
Express the following comparative income statements in common-size percents. Using the common-size percentages, which item is...
Express the following comparative income statements in common-size percents. Using the common-size percentages, which item is most responsible for the decline in net income? Complete this question by entering your answers in the tabs below. Income Reason for Statement Decline in Net Income Express the following comparative income statements in common-size percents. (Round your percentage answers to 1 decimal place.) GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Year Prior Year $ % $ % Sales $...
Express the following comparative income statements in common-size percents. Using the common-size percentages, which item is...
Express the following comparative income statements in common-size percents. Using the common-size percentages, which item is most responsible for the decline in net income? Complete this question by entering your answers in the tabs below. Reason for Income Statement Decline in Net Income Express the following comparative income statements in common-size percents. (Round your percentage answers to 1 decimal place.) GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Year Prior Year % $ % $ Sales Cost...
Express the following comparative income statements in common-size percents. Using the common-size percentages, which item is...
Express the following comparative income statements in common-size percents. Using the common-size percentages, which item is most responsible for the decline in net income? Express the following comparative income statements in common-size percents. (Round your percentage answers to 1 decimal place.) GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Year Prior Year $ % $ % Sales $795,000 100.0 $665,000 Cost of goods sold 568,100 284,400 Gross profit 226,900 380,600 Operating expenses 129,200 237,200 Net income $97,700...
Express the following comparative income statements in common-size percents. Using the common-size percentages, which item is...
Express the following comparative income statements in common-size percents. Using the common-size percentages, which item is most responsible for the decline in net income? Income Reason for Statement Decline in Net Income Express the following comparative income statements in common-size percents. (Round your percentage answers to 1 decimal place.) GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Year Prior Year $ % $ % Sales $ 740,000 $ 670,000 Cost of goods sold 568, 100 288,800 Gross...
1.) Express the following comparative income statements in common-size percents. Using the common-size percentages, which item...
1.) Express the following comparative income statements in common-size percents. Using the common-size percentages, which item is most responsible for the decline in net income? Reason for Income Statement Decline in Net Income Express the following comparative income statements in common-size percents. (Round your percentage answers to 1 decimal place.) GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Year Prior Year % % Sales Cost of goods sold 770,000 $635,000 284,400 568,100 Gross profit Operating expenses Net...
Express the following comparative income statements in common-size percents. Using the common-size percentages, which item is...
Express the following comparative income statements in common-size percents. Using the common-size percentages, which item is most responsible for the decline in net income? Reason for Income Statement Decline in Net Income Express the following comparative income statements in common-size percents. (Round your percentage answers to 1 decimal place.) GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Year Prior Year $ % % Sales $ 790,000 $ 645,000 Cost of goods sold 565,400 299 800 Gross profit...
Common-size financial statements are often used by auditors in a process called “analytical procedures” or “analytical...
Common-size financial statements are often used by auditors in a
process called “analytical procedures” or “analytical review.”
Unusual relationships or patterns can be identified because of the
percentages—these would be harder to see if the amounts were just
kept as dollars. You will be looking for percentages that seem very
unstable over the times periods (the percentages jump around too
much).
What are some of the unusual relationships you see? Please
identify and discuss at least two unusual relationships. Please...
Che Express the following comparative income statements in common-size percents. Using the common-size percentages, which item...
Che Express the following comparative income statements in common-size percents. Using the common-size percentages, which item is most responsible for the decline in net income? Income Statement Reason for Decline in Net Income Express the following comparative income statements in common-size percents. (Round your percentage answers to 1 decimal place.) the GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Year Prior Year $ % $ Sales $ 795,000 $ 690,000 Cost of goods sold 568,100 286,600 Gross...
k -Chapter 36 Saved Exercise 3-18 Using common size statements and ratlos to make comparisons LO...
k -Chapter 36 Saved Exercise 3-18 Using common size statements and ratlos to make comparisons LO 3-5 At the end of 2018 the following information is available for Billings and Phoneix companies Billings Phoneix 53,000,e00 $3,00e Cost of goods sold 1,80,e00 2,100 780 3,758,880 3,758 Stockholders' equity 1,8e0,8e0 1,200 Sales Operating expenses Total assets 960,800 Required a. Prepare common size income statements for each company b. One company is a high-end retailer. and the other operates a discount store. Which...
Common-Size Income Statement Prepare common-size income statements by using Year 1 as the base period. (Note:...
Common-Size Income Statement Prepare common-size income statements by using Year 1 as the base period. (Note: Enter all amounts as positive numbers, except for a net loss. Enter net loss as a negative number, if applicable. Round answers to the nearest whole percentage. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries.) Scherer Company Common-Size Income Statements Years of Operation Year 1 Year 1 Year 2 Year 2 Year...
Express the following comparative income statements in common-size percents. Using the common-size percentages, which item is most responsible for the decline in net income? Complete this question by entering your answers in the tabs below. Income Reason for Statement Decline in Net Income Express the following comparative income statements in common-size percents. (Round your percentage answers to 1 decimal place.) GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Year Prior Year $ % $ % Sales $...
Express the following comparative income statements in common-size percents. Using the common-size percentages, which item is most responsible for the decline in net income? Complete this question by entering your answers in the tabs below. Reason for Income Statement Decline in Net Income Express the following comparative income statements in common-size percents. (Round your percentage answers to 1 decimal place.) GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Year Prior Year % $ % $ Sales Cost...
Express the following comparative income statements in common-size percents. Using the common-size percentages, which item is most responsible for the decline in net income? Income Reason for Statement Decline in Net Income Express the following comparative income statements in common-size percents. (Round your percentage answers to 1 decimal place.) GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Year Prior Year $ % $ % Sales $ 740,000 $ 670,000 Cost of goods sold 568, 100 288,800 Gross...
1.) Express the following comparative income statements in common-size percents. Using the common-size percentages, which item is most responsible for the decline in net income? Reason for Income Statement Decline in Net Income Express the following comparative income statements in common-size percents. (Round your percentage answers to 1 decimal place.) GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Year Prior Year % % Sales Cost of goods sold 770,000 $635,000 284,400 568,100 Gross profit Operating expenses Net...
Express the following comparative income statements in common-size percents. Using the common-size percentages, which item is most responsible for the decline in net income? Reason for Income Statement Decline in Net Income Express the following comparative income statements in common-size percents. (Round your percentage answers to 1 decimal place.) GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Year Prior Year $ % % Sales $ 790,000 $ 645,000 Cost of goods sold 565,400 299 800 Gross profit...
Common-size financial statements are often used by auditors in a
process called “analytical procedures” or “analytical review.”
Unusual relationships or patterns can be identified because of the
percentages—these would be harder to see if the amounts were just
kept as dollars. You will be looking for percentages that seem very
unstable over the times periods (the percentages jump around too
much).
What are some of the unusual relationships you see? Please
identify and discuss at least two unusual relationships. Please...
Che Express the following comparative income statements in common-size percents. Using the common-size percentages, which item is most responsible for the decline in net income? Income Statement Reason for Decline in Net Income Express the following comparative income statements in common-size percents. (Round your percentage answers to 1 decimal place.) the GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Year Prior Year $ % $ Sales $ 795,000 $ 690,000 Cost of goods sold 568,100 286,600 Gross...
k -Chapter 36 Saved Exercise 3-18 Using common size statements and ratlos to make comparisons LO 3-5 At the end of 2018 the following information is available for Billings and Phoneix companies Billings Phoneix 53,000,e00 $3,00e Cost of goods sold 1,80,e00 2,100 780 3,758,880 3,758 Stockholders' equity 1,8e0,8e0 1,200 Sales Operating expenses Total assets 960,800 Required a. Prepare common size income statements for each company b. One company is a high-end retailer. and the other operates a discount store. Which...
Common-Size Income Statement Prepare common-size income statements by using Year 1 as the base period. (Note: Enter all amounts as positive numbers, except for a net loss. Enter net loss as a negative number, if applicable. Round answers to the nearest whole percentage. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries.) Scherer Company Common-Size Income Statements Years of Operation Year 1 Year 1 Year 2 Year 2 Year...
Most questions answered within 3 hours.
-
) Assume that in the market for widgets, demand is highly
elastic compared to supply. If...
asked 7 minutes ago -
Why is a personal interview the most important step in the sales
selection process? What are...
asked 17 minutes ago -
In Python rOverlap (x1, y1, w1, h1, x2, y2, w2, h2) A rectangle
is axis-aligned if...
asked 17 minutes ago -
If we observe in a protein solution that DNA is causing a
mixture 260/280 ratio ~0.9,...
asked 27 minutes ago -
Explain the steps involved in making cDNA from mRNA, and how you
would create a cDNA...
asked 28 minutes ago -
A beta (β) particle is described by which of the following?
Select the correct answer below:...
asked 31 minutes ago -
A new machine costs $150,000, lasts 10 years, has an annual
O&M cost of $50,000, and...
asked 34 minutes ago -
A newspaper in a large Midwestern city reported that the
National Association of Realtors said that...
asked 36 minutes ago -
1. Develop a use case diagram for the bank case study described
in Chapter 1. 2....
asked 45 minutes ago -
The phylum Protista has often been referred to as a junk drawer
of classification. Explain what...
asked 52 minutes ago -
The average amount of money spent for lunch per person in the
college cafeteria is $7.09...
asked 54 minutes ago -
You follow the lab procedure and at the end of Part 4C, you used
an average...
asked 1 hour ago