Perform a Horizontal Analysis for the Entry "Gross Sales" Shown

question 102

Short Answer

Perform a horizontal analysis for the entry "Gross Sales" shown on the income statement portion below. (Round to the nearest tenth) $\begin{array}{c}\begin{array}{lll}\\\\\hline \text {Revenue}\\ \text {Gross Sales}\\ \text {Less: Sales Returns and Allowances}\\ \text {Net Sales}\\ \text {Cost of Good Sold}\\ \text {Merchandise Inventory, Jan. 1}\\ \text {Net purchases}\\ \text {Goods Available for Sale}\\ \text {Less: Merchandise Inventory, Dec. 31}\\ \text {Cost of Goods Sold}\\ \text {Gross Margin} \end{array}\begin{array}{l}\\2012 \\\hline \\\$ 163,000 \\7,300 \\155,700 \\\\39,600 \\74,400 \\114,000 \\50,800 \\63,200 \\\$ 92,500 \end{array}\begin{array}{lll}\\2011\\\hline \\117,400\\7,600\\109,800\\\\32,100\\61,800\\93,900\\70,100\\23,800\\\$ 86,000 \end{array}\begin{array}{lll}\text {Increase/Decrease}\\\text {Amount Percent}\\\hline \\\\\\\\\\\\\\\\\\\\\\\end{array}\end{array}$

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Definitions:

Packing And Shipping Costs

Expenses associated with preparing and sending goods to customers, including materials for packing and freight charges.

Parts

Components or materials used in the manufacturing or assembly of a product, often inventoried and managed as part of the supply chain process.

Purchasing Department

A department within a business that is responsible for acquiring goods and services needed for the company’s operations.

Budgeted Costs

Budgeted costs are estimated expenses that a company plans to incur during a specific period for various activities or projects.