Question

Jack Corporation uses horizontal analysis to compare its income statement from year to year. Jack Corporation reported the following data last year as well as the percent change when compared to the current year:
Total Last Year % Change in Current Year
Sales Revenue $600,000 7.00%
Cost of Goods Sold $180,000 1.00%
Gross Profit $420,000

What is the Cost of Goods Sold in the current year?

A. $657,600
B. $560,748
C. $642,000
D. $42,000

Answer 1

Answer:

Current year cost of goods sold is $181,800.

Explanation:

The current year cost of goods sold is calculated as follows:

Current year cost of goods sold = Last year cost of goods sold + Current year change

= $180,000 + ($180,000 * 1%)

= $180,000 + $1,800

= $181,800

Therefore, current year cost of goods sold is $181,800.