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20 June, 02:14

Ronaldo Soccer Shop's income statement reports sales of $100,000; cost of goods sold of $46,000, operating expenses of $34,000, interest expense of $15,000, income tax expense of $2,000, and net income of $3,000. If you were to perform a vertical analysis of this income statement, you would divide each of these income statement line items by:

a. $3,000

b. $46,000

c. $34,000

d. $100,000

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  1. 20 June, 02:21
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    d. $100,000

    Explanation:

    Ronaldo Soccer Shop

    Income Statement

    Sales $100,000;

    Cost of goods sold $46,000,

    Operating expenses $34,000,

    Interest expense $15,000,

    Income tax expense $2,000,

    Net Income $3,000

    The vertical analysis of the income statement is performed by dividing each of these income statement line items by the total sales.

    Vertical Analysis (income Statement) = (Income Statement Item / Total Sales) * 100
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