Revenue and Expense Data for Bluestem Company Are as Follows

question 56

Essay

Revenue and expense data for Bluestem Company are as follows:? $\begin{array}{lrr}&\text { Year } 2&\text { Year } 1\\\text { Administrative expenses } & \$ 37,000 & \$ 20,000 \\\text { Cost of goods sold } & 350,000 & 320,000 \\\text { Income tax } & 40,000 & 32,000 \\\text { Sales } & 800,000 & 700,000 \\\text { Selling expenses } & 150,000 & 110,000\end{array}$ (a)Prepare a comparative income statement, with vertical analysis, stating each item for both years as a percent of sales.
(b)Comment on significant changes disclosed by the comparative income statement.?Round percentages to one decimal place.

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Definitions:

Identifiable Cash Flows

Cash flows that can be directly linked to a specific project, investment, or business segment.

Income From Sustainable Operations

Earnings generated from a company’s core business activities that are expected to continue into the future.

Income Statement

A financial statement that shows a company's revenues, expenses, and profit over a specific time period.

Period Costs

Expenses that are not directly tied to the production of goods or services and are instead incurred over a specific time period, such as administrative and selling expenses.