Question

Sales Cost of goods sold Accounts receivable 2019 2018 2017 2016 $ 620,481 $ 408, 211 $ 331,879 $ 225,768 $ 318,945 209,888 172,408 1 17,092 30,031 23,799 22,734 13,230 2015 163,600 83,436 11,190 Compute trend percents for the above accounts, using 2015 as the base year. Trend Percent for Net Sales: | Choose Denominator: Choose Numerator: Trend percent 2019: 2018: 2017: 2016:

Answer 1

Sales Trend Percentage For Net Sales Numerator Denominator Current year / Base year 2019) 620481 / 163600 2018 408211 / 163600 2017 331879 / 163600 2016 225768 / 163600 379% 250 % 203% 138% Trend Percentage For cost of goods sold Numerator Denominator Current year / Base year Costof goods sold 2019 3189457 83436 382 % 2018 209888 / 83436 252 % 2017| 172408 / 83436 207% 2016 117092 / 83436 140% 2019 2018 2017 2016 Trend Percentage For Account Receivable ! Numerator 7 Denominator Current year / Base year = Accounts Receivable 30031 / 11190 268 % 23799 / 11190 213% 22734 11190 203% 132301 11190 118 %

GOMEZ CORPORATION Comparative Income Statement For the year Ended December 31 Current year Prior Year Net Sales Less: Cost of goods sold Gross profit Operating expenses Net Income 785000 565400 219600 128000 91600 100.0 % 72.0 % 28.0 % 16.3 % 11.7 % 680000 2866000 393400 228800 164600 100.0 % 42.1 % 57.9% 33.6 % 24.2 % Using the common size percentage, which item is most responsible for the decline in net income Cost of goods sold