ACCOUNTING PROBLEM SOLVE Operating data for Ayayai Corp. are presented below 201

Question

ACCOUNTING PROBLEM SOLVE

Operating data for Ayayai Corp. are presented below 2017 2016 Sales revenue Cost of goods sold Selling expenses Administrative expenses Income tax expense Net income $821,000 521,000 121,000 73,000 33,000 73,000 $621,000 409,000 73,000 49,000 22,600 67,400 Prepare a schedule showing a vertical analysis for 2017 and 2016. (Round percentages to 1 decimal place, eg. 12.1%.) AYAYAI CORP 2017 2016 Percent Amount $821,000 521,000 300,000 121,000 73,000 Total operating expenses 194,000 Income before income taxes 106,000 33,000 73,000 % $621,000 Cost of goods sold Gross proft Selling expenses Administrative expenses % 409,000 % 212,000 % 73,000 49,000 96 122,000 90,000 % 22,600 % 67,400 Income tax expense Net income

Explanation / Answer

Selling expenses

2017 2016 Amount Percent Amount Percent Sales 821000 100.0% 621000 100.0% Cost of goods sold 521000 63.5% 409000 65.9% Gross profit 300000 36.5% 212000 34.1%

Selling expenses

121000 14.7% 73000 11.8% Administrative expenses 73000 8.9% 49000 7.9% Total operating expenses 194000 23.6% 122000 19.6% Income before income taxes 106000 12.9% 90000 14.5% Income taxes expense 33000 4.0% 22600 3.6% Net income 73000 8.9% 67400 10.9%

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