Vertical analysisThe following percentages apply to Hague Company for 2005 and 2006.

Vertical analysis

The following percentages apply to Hague Company for 2005 and 2006.

 

 

2006

2005

Sales

100.0%

100.0%

Cost of Goods Sold

61.0

64.0

Gross Margin

39.0

36.0

Selling and Administrative Expense

26.5

20.5

Interest Expense

2.5

2.0

Total Expenses

29.0

22.5

Income before Taxes

10.0

13.5

Income Tax Expense

5.5

7.0

Net Income

4.5%

6.5%

Required

Assuming that sales were $600,000 in 2005 and $800,000 in 2006, prepare income statements for the two years.

 

 

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