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 |
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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 | % |
--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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