Question

Using the following income statements, perform the calculations needed for vertical analyses. (Round percentage values to 1 decimal place.)

LOCKEY FENCING CORPORATION
Income Statements
For the Years Ended December 31
	Current			Previous
Net Sales	$190,000		%	$129,000		%
Cost of Goods Sold	94,000			72,000
Gross Profit	96,000			57,000
Selling, General, and Administrative Expenses	14,400			8,100
Income from Operations	81,600			48,900
Interest Expense	4,800			6,450
Income before Income Tax	76,800			42,450
Income Tax Expense	23,040			12,735
Net Income	$53,760		%	$29,715		%

Answer 1

Solution:

LOCKEY FENCING CORPORATION
Income Statements
For the Years Ended December 31
	Current		Previous
Net Sales	$1,90,000	100.0%	$1,29,000	100.0%
Cost of Goods Sold	$94,000	49.5%	$72,000	55.8%
Gross Profit	$96,000	50.5%	$57,000	44.2%
Selling, General, and Administrative Expenses	$14,400	7.6%	$8,100	6.3%
Income from Operations	$81,600	42.9%	$48,900	37.9%
Interest Expense	$4,800	2.5%	$6,450	5.0%
Income before Income Tax	$76,800	40.4%	$42,450	32.9%
Income Tax Expense	$23,040	12.1%	$12,735	9.9%
Net Income	$53,760	28.3%	$29,715	23.0%