E9-4 Prepare vertical analysis Operating data for Joshua Corporation are present

Question

E9-4   Prepare vertical analysis Operating data for Joshua Corporation are presented below. 2017 2016 Sales revenue ####### ####### Cost of goods sold 520,000 408,000 Selling expenses 120,000 72,000 Administrative expenses 60,000 48,000 Income tax expense 30,000 24,000 Net income 70,000 48,000 Instructions Prepare a schedule showing a vertical analysis for 2017 and 2016. NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" . JOSHUA CORPORATION Condensed Income Statement For the Years Ended December 31 2017 2016 Amount Percent Amount Percent Sales Revenue Value ? Value ? Cost of goods sold Value ? Value ? Gross profit ? ? ? ? Selling expenses Value ? Value ? Administrative expenses Value ? Value ? Total operating expenses ? ? ? ? Income before income taxes ? ? ? ? Income tax expense Value ? Value ? Net income ? ? ? ? E9-4   Prepare vertical analysis Operating data for Joshua Corporation are presented below. 2017 2016 Sales revenue ####### ####### Cost of goods sold 520,000 408,000 Selling expenses 120,000 72,000 Administrative expenses 60,000 48,000 Income tax expense 30,000 24,000 Net income 70,000 48,000 Instructions Prepare a schedule showing a vertical analysis for 2017 and 2016. NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" . JOSHUA CORPORATION Condensed Income Statement For the Years Ended December 31 2017 2016 Amount Percent Amount Percent Sales Revenue Value ? Value ? Cost of goods sold Value ? Value ? Gross profit ? ? ? ? Selling expenses Value ? Value ? Administrative expenses Value ? Value ? Total operating expenses ? ? ? ? Income before income taxes ? ? ? ? Income tax expense Value ? Value ? Net income ? ? ? ?

Explanation / Answer

Condensed Income Statement For the Years Ended December 31 2017 2016 Amount Percent Amount Percent Sales Revenue 800000 100.00% 600000 100.00% Cost of goods sold 520000 65.00% 408000 68.00% Gross profit 280000 35.00% 192000 32.00% Selling expenses 120000 15.00% 72000 12.00% Administrative expenses 60000 7.50% 48000 8.00% Total operating expenses 180000 22.50% 120000 20.00% Income before income taxes 100000 12.50% 72000 12.00% Income tax expense 30000 3.75% 24000 4.00% Net income 70000 8.75% 48000 8.00% Alternatively, percentage for income tax expense and net income in 2017 will be 3.8% and 8.8%

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