Olivera Company provides the following data for the year 2013:
$$\begin{array} { l r }
\text { Net sales revenue } & \$ 398,000 \
\text { Cost of goods sold } & \$ 255,000 \
\text { Operating expenses } & \$ 95,000 \
\text { Income tax expense } & \$ 9,000
\end{array}$$
- On a vertical analysis, what percentage would be shown for income tax expense?
A) 2.3%
B) 6.3%
C) 2.9%
D) 3.4%

Question

Olivera Company provides the following data for the year 2013:
$$\begin{array} { l r } 
\text { Net sales revenue } & \$ 398,000 \
\text { Cost of goods sold } & \$ 255,000 \
\text { Operating expenses } & \$ 95,000 \
\text { Income tax expense } & \$ 9,000
\end{array}$$
-  On a vertical analysis, what percentage would be shown for income tax expense?
A) 2.3%
B) 6.3%
C) 2.9%
D) 3.4%

Quizplus · Accepted Answer

Income tax expense is $9,000. Net sales revenue is $398,000. So, income tax expense is 9,000/398,000 * 100 = 2.3%.

Olivera Company Provides the Following Data for the Year 2013