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In 2019, the percentage of cost of goods sold in vertical analysis 80%, and the cost...

In 2019, the percentage of cost of goods sold in vertical analysis 80%, and the cost of goods sold for the year 2019 was $50,000. net sales in 2019 is

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Answer #1

In vertical analysis, all the figures in income statement in expressed in percentage of sales as the sales are assumes base figure equal to 100%.

Therefore, if the percentage of cost of goods sold in vertical analysis 80% in 2019; it means that cost of goods sold is 80% of net sale

It is also given that the cost of goods sold for the year 2019 was $50,000

Therefore,

The cost of goods sold for the year 2019 = 80% net sales in 2019

Or $50,000 = 80% net sales in 2019

Or Net sales in 2019 = $50,000/ 80% = $50,000/0.8 = $62,500

Therefore, the net sales in 2019 is $62,500

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