Question

Operating data for Joshua Corporation are presented below.

		2020		2019
Sales revenue		$749,000		$603,000
Cost of goods sold		467,376		390,744
Selling expenses		118,342		69,948
Administrative expenses		58,422		59,094
Income tax expense		29,211		26,532
Net income		75,649		56,682

Prepare a schedule showing a vertical analysis for 2020 and 2019. (Round answers to 1 decimal place, e.g. 48.5%.)

JOSHUA CORPORATION Condensed Income Statements For the Years Ended December 31
	2020				2019
	Amount		Percent		Amount		Percent
Sales revenue	$749,000		%		$603,000		%
Cost of goods sold	467,376		%		390,744		%
Gross profit	281,624		%		212,256		%
Selling expenses	118,342		%		69,948		%
Administrative expenses	58,422		%		59,094		%
Total operating expenses	176,764		%		129,042		%
Income before income taxes	104,860		%		83,214		%
Income taxes expense	29,211		%		26,532		%
Net income	$75,649		%		$56,682		%

Answer 1

Prepare a schedule showing a vertical analysis for 2020 and 2019
JOSHUA CORPORATION
Condensed Income Statements Comparative Income Statement
For the Years Ended December 31
		2020		2019
		Amount	Percent	Amount	Percent
	Sales	$          749,000	100.0%	$          603,000	100.0%
	Cost of Goods sold	$          467,376	62.4%	$          390,744	64.8%
	Gross Profit	$          281,624	37.6%	$          212,256	35.2%
	Selling expenses	$          118,342	15.8%	$            69,948	11.6%
	Administrative Expenses	$            58,422	7.8%	$            59,094	9.8%
	Total Operating Expenses	$          176,764	23.6%	$          129,042	21.4%
	Income before Income Taxes	$          104,860	14.0%	$            83,214	13.8%
	Income tax expense	$            29,211	3.9%	$            26,532	4.4%
	Net Income	$            75,649	10.1%	$            56,682	9.4%
Note:-	Every % is calculated by taking base as sales figure.	2020		2019
	Cost of Goods sold	467,376	×100	390,744	×100
		749,000		603,000
		62.4%		64.8%
	Gross Profit	281,624	×100	212,256	×100
		749,000		603,000
		37.6%		35.2%
	Selling expenses	118,342	×100	69,948	×100
		749,000		603,000
		15.8%		11.6%
	Administrative Expenses	58,422	×100	59,094	×100
		749,000		603,000
		7.8%		9.8%
	Total Operating Expenses	176,764	×100	129,042	×100
		749,000		603,000
		23.6%		21.4%
	Income before Income Taxes	104,860	×100	83,214	×100
		749,000		603,000
		14.0%		13.8%
	Income tax expense	29,211	×100	26,532	×100
		749,000		603,000
		3.9%		4.4%
	Net Income	75,649	×100	56,682	×100
		749,000		603,000
		10.1%		9.4%

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