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ABC Computers

II. Create an income statement that finds the gross profit and net income for ABC Computers for the year ending August 31, 2007 if the company had net sales of $28,625; cost of goods sold of $13,247; and operating expenses of $2,752.

III. Complete a vertical analysis of the income statement in part two.

IV. In 2006, ABC Computers had net sales of 24,525; cost of goods sold of $15,895; and operating expenses of $3,285. Prepare a comparative income statement with a vertical analysis of 2006 and 2007.

Solution Preview

II. Create an income statement that finds the gross profit and net income for ABC Computers for the year
ending August 31, 2007 if the company had net sales of $28,625; cost of goods sold of $13,247; and
operating expenses of $2,752.

You can use the information given to find the gross profit and net income as follows: -

ABC Computers
Income Statement
For the year ended August 31, 2007

Sales 28,625
Less: Cost of goods ...

Solution Summary

This solution is comprised of a detailed explanation to create an income statement that finds the gross profit and net income for ABC Computers for the year ending August 31, 2007 if the company had net sales of $28,625; cost of goods sold of $13,247; and operating expenses of $2,752, complete a vertical analysis of the income statement in part two, and prepare a comparative income statement with a vertical analysis of 2006 and 2007.

$2.19