Use the Following Information About the Reimer Company to Do

question 75

Essay

Use the following information about The Reimer Company to do a vertical analysis of the income statement for the current year.Fill in the missing components in the table.
$$\begin{array} { | l | l | l | l | } \hline \text { Account } & \text { Current } & \text { Prior } & \text { Percent } \\\hline \text { Net sales revenue } & \$ 350,000 & \$ 312,000 & \\\hline \text { Cost of goods sold } & \$ 203,000 & \$ 215,000 & \\\hline \text { Gross profit } & \$ 147,000 & \$ 97,000 & \\\hline \text { Selling/general expenses } & \$ 80,500 & \$ 36,500 & \\\hline \text { Net income before tax } & \$ 66,500 & \$ 60,500 & \\\hline \text { Income tax } & \$ 10,500 & \$ 6,400 & \\\hline \text { Net income } & \$ 56,000 & \$ 54,100 & \\\hline\end{array}$$

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Definitions:

Perpetual Inventory System

A perpetual inventory system continuously tracks inventory levels and costs, updating records with each receipt or sale of goods.

Physical Inventory

The process of counting by hand the actual inventory that a company holds in its premises, as opposed to counting based on purchase and sale records.

Cost Of Goods Sold

Expenses directly incurred from the manufacturing of a company’s goods for sale, such as materials and labor.

Gross Profit

The difference between revenue and the cost of goods sold before deducting operating expenses, interest, and taxes.