Question

Revenue and expense data for Young Technologies Inc. are as follows:

	Year 2		Year 1
Sales	$500,000		$440,000
Cost of goods sold	325,000		242,000
Selling expenses	70,000		79,200
Administrative expenses	75,000		70,400
Income tax expense	10,500		16,400

Required:

a. Prepare an income statement in comparative form, stating each item for both years as an amount and as a percent of sales. Round percentage amounts to nearest whole percent.

Young Technologies Inc.
Comparative Income Statement
For the Years Ended December 31, Year 2 and Year 1
	Year 2 Amount	Year 2 Percent	Year 1 Amount	Year 1 Percent
	$	%	$	%
	$	%	$	%
	$	%	$	%
Total expenses	$	%	$	%
	$	%	$	%
	$	%	$	%

b. Complete the following regarding the significant changes disclosed by the comparative income statement.

The vertical analysis indicates that the cost of goods sold as a percent of sales   between the two years. Selling and administrative expenses as a percentage of sales   and income tax expense  . Overall, net income as a percent of sales  .

Answer 1

Calculate every amount as % of sales @ 500000

amount/sales*100

Young Technologre ine Statement Comparahive income Dec 31 FOr Tho ea rs erded Yeal 2 Yea Amount Aman $u40000 001 001 $ 500000 Sales $242000 $ 325000 55.1. 65.1 cOSt ot goody sald Gross oft 451 (98000 $I75000 35-1 selling nfencs $ 70000 $79200 Admin efences 5- 16.1 $10400 15000 Tolal epenco 14600 145000 3५/. tncomo from $48400 30000 Oferahons 16400 tncome far fena Net income $ 32000 7-/ 19s00 analy sis naicae/ The ver ti cal COSt of good cdld a a of Salej nceayodd by lov. sellng 4adtmun aflen oj -s. of Saly decreajed by 5. a (-a) (T-) Inc ome T0fen decreakd ncreakd hy 31 Net income af '. of 9aly