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