Question

2 Income statement data for Starr Canning Corporation are as follows: 2009 2008 Sales $1,400,000 $1,200,000 Cost of goods sold 850,000 730,000 Selling expenses 205,000 240,000 General expenses 140,000 100,000 Income tax expense 82,000 50,000 Required a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales (vertical common-size analysis)

Answer 1

Answer and Explanation:

The preparation of the income statement in comparative form is presented in the attachment below

The vertical analysis refers to analysis made to the financial statements. In the balance sheet, the item with respect to the common base for the other items should be expressed in total assets while for the income statement it should be total revenues

Since we have to make the income statement so the same should be expressed in total revenues

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