ACC141 OM2 Managerial Accounting
Homework: Assign 3 - chap 14 - vertical & common size
Score: 0 of 1 pt
14.2-22a
Gavette Company reported the following information for the current year and prior year:
Account
Net sales revenue
COGS
Gross Profit
Selling/General Exp.
Net income before tax
Income Tax
Net Income
Current year
Percentage
Prior year
$370,200
100%
$300,000
$223,320
?
$240,000
$146,880
39.68%
$60,000
$69,768
18.85%
$12,000
$77,112
?
$48,000
$8,344
2.25%
$3,000
$68,768
?
$45,000
What would a vertical analysis report with respect to current year net income before income tax and income tax expense?
A. A decrease of $20,768 in net income before tax
B. An increase of both net income before income tax and income tax of 20.83%
C. An increase of $20,768 from prior to current year
D. Net income before tax of 20.83% and income tax of 2.25% of net sales revenue
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