Revenue and expense data for Bluestem Company are as follows: Year 2 Year 1
Administrative expenses $37,720 $20,300
Cost of goods sold 360,000 319,900
Income tax 41,000 32,200
Sales 820,000 700,000
Selling expenses 154,160 109,900

Required:
Prepare a comparative income statement, with vertical analysis, stating each item for both years as a percent of sales.

Answer and Explanation:

The preparation of a comparitive income statement, with vertical analysis, stating each item for both years as a percent of sales is prepared below with the help of the attached spreadsheet:-

The formula that we have used is shown below:-

Gross profit percent = Gross profit / Sales revenue

Cost of goods sold percent = Cost of goods sold / Sales revenue

and in a similar way operating expenses items.

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