epare a horizontal analysis of the income statement data for Marks Corporation u

Question

epare a horizontal analysis of the income statement data for Marks Corporation using 2012 as a base. (Show the amounts of increase or decrease.,) Prepare a vertical analysis of the income statement Instructions (a) Pr data for Marks Corporation in columnar form (b) for both years. Ex. 200 Operating data for Martin Corporation are presented below Net sales Cost of goods sold Operating expenses Net income 2012 $600,000 320,000 130,000 150,000 Instructions Prepare a schedule showing a vertical analysis for 2012. Ex. 201 The following information was taken from the financial statements of Lawson Company: 20132012 Gross profit on sales. Income before income taxes... Net incom Net income as a percentage of net sales $900,000 280,000 240,000 8% $840,000 230,000 216,000 9% Instructions (a) Compute the net sales for each year. (b) Compute the cost of goods sold in dollars and as a percentage of net sales for each year. c) Compute operating expenses in dollars and as a percentage of net sales for each year. (Income taxes are not operating expenses).

Explanation / Answer

Ex 200. Amount in $ % of sales Net sales 600000 100% Cost of goods sold 320000 53.33% Gross Margin 280000 46.67% Operating expense 130000 21.67% Net income 150000 25% Ex 201. 2013 2012 Net income 240000 216000 Net income as % of sales 8% 9% Net sales 3000000 2400000 Net sales 3000000 2400000 Less: Gross profit 900000 840000 Cost of Goods sold 2100000 1560000 COGS as % of sales 70% 65% Gross Profit 900000 840000 Less: Income before tax 280000 230000 Operating expense 620000 610000 Operating expense 20.67% 25.42% (as % of sales)

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