The following information is provided from EZ Electronics' annual report for the years ended December 31:

-Refer to the EZ Electronics annual report above.Using vertical analysis,2011 income tax expense would be represented as ________.
A)9%
B)100%
C)30%
D)43%

Question

The following information is provided from EZ Electronics' annual report for the years ended December 31:

-Refer to the EZ Electronics annual report above.Using vertical analysis,2011 income tax expense would be represented as ________.
A)9% 
B)100% 
C)30% 
D)43%

Quizplus · Accepted Answer

In vertical analysis, each item on the financial statement is listed as a percentage of another item. For income tax expense, it would be represented as a percentage of total revenue or net income. Since the specific figures from the EZ Electronics annual report are not provided, the correct answer cannot be determined based on the information given. However, typically, income tax expense would not be 100% of revenue or net income (B), and it's unlikely to be as high as 43% (D) in most jurisdictions. Without specific figures, 9% (A) seems like a plausible representation for income tax expense in relation to total revenue or net income, making it the best choice among the options provided.

The Following Information Is Provided from EZ Electronics' Annual Report