The comparative condense balance sheets of Marks Corporation are presented below
ID: 2461176 • Letter: T
Question
The comparative condense balance sheets of Marks Corporation are presented below.
MARKS CORPORATION
Comparative Condensed income statments
For the years ended December 31
2017 2016
Net Sales $620,000 $500,000
Cost of goods sold 450,000 400,000
gross profit 170,000 100,000
operating expenses 54,000 40,000
Net income $116,000 $60,000
instructions:
a) Prepare a horizaontal analysis of the income statement data for Marks Corporation using 2016 as a base (show the amounts of increase or decrease)
b) Prepare a vertical analysis of the income statement data for the Marks Corporation in columnar form for both years.
Explanation / Answer
Horizontal Analysis of Income Statement Marks Corporation 2016 2017 Variance Net Sales $500,000 $620,000 $120,000 Cost of Goods Sold $400,000 $450,000 ($50,000) Gross Profit $100,000 $170,000 $70,000 Operating Expenses $40,000 $54,000 ($14,000) Net Income $60,000 $116,000 $56,000 Vertical Analysis of Income Statement Marks Corporation 2016 % 2017 % Net Sales $500,000 100% $620,000 100% Cost of Goods Sold $400,000 80% $450,000 73% Gross Profit $100,000 20% $170,000 27% Operating Expenses $40,000 8% $54,000 9% Net Income $60,000 12% $116,000 19%