Question

For 20Y2, Fielder Industries Inc. initiated a sales promotion campaign that included the expenditure of an...

For 20Y2, Fielder Industries Inc. initiated a sales promotion campaign that included the expenditure of an additional $40,000 for advertising. At the end of the year, Leif Grando, the president, is presented with the following condensed comparative income statement:

Fielder Industries Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Y2 20Y1
Sales $1,300,000 $1,180,000
Cost of goods sold (682,500) (613,600)
Gross profit $617,500 $566,400
Selling expenses $(260,000) $(188,800)
Administrative expenses (169,000) (177,000)
Total operating expenses $(429,000) $(365,800)
Operating income $188,500 $200,600
Other revenue 78,000 70,800
Income before income tax expense $266,500 $271,400
Income tax expense (117,000) (106,200)
Net income $149,500 $165,200

Required:

1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to sales for each of the years. Round to one decimal place. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Fielder Industries Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Y2
Amount
20Y2
Percent
20Y1
Amount
20Y1
Percent
Sales $1,300,000 % $1,180,000 %
Cost of goods sold (682,500) % (613,600) %
Gross profit $617,500 % $566,400 %
Selling expenses $(260,000) % (188,800) %
Administrative expenses (169,000) % (177,000) %
Total operating expenses $(429,000) % $(365,800) %
Operating income $188,500 % $200,600 %
Other revenue 78,000 % 70,800 %
Income before income tax expense $266,500 % $271,400 %
Income tax expense (117,000) % (106,200) %
Net income $149,500 % $165,200 %

Homework Answers

Answer #1

--Requirement 1

Fielder Industries Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Y2 20Y2 20Y1 20Y1
Amount Percent Amount Percent
Sales $1,300,000 100.0% $1,180,000 100.0%
Cost of goods sold ($682,500) -52.5% ($613,600) -52.0%
Gross profit $617,500 47.5% $566,400 48.0%
Selling expenses ($260,000) -20.0% ($188,800) -16.0%
Administrative expenses ($169,000) -13.0% ($177,000) -15.0%
Total operating expenses ($429,000) -33.0% ($365,800) -31.0%
Operating income $188,500 14.5% $200,600 17.0%
Other revenue $78,000 6.0% $70,800 6.0%
Income before income tax expense $266,500 20.5% $271,400 23.0%
Income tax expense ($117,000) -9.0% ($106,200) -9.0%
Net income $149,500 11.5% $165,200 14.0%
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