Question

tranquility massage and spa launched a new promotional package at the beginning of the second quarter. the owner wants to know how the new total relaxation spa package affected the company’s profitability in q2 2023. the bookkeeper runs a comparative income statement to answer the question. directions: select and review the accounts image. select all that apply, then select submit. the new package had no effect on the revenue from q1 to q2. the new package increased the revenue by 25% from q1 to q2. the new package increased the cost of goods sold by 25% from q1 to q2. the new package increased the operating income by 50% from q1 to q2. submit. tranquility massage and spa income statement q1 q2 revenue $120,000 $150,000 cost of goods sold $30,000 $37,500 gross profit $90,000 $112,500 operating expenses $60,000 $67,500 operating income $30,000 $45,000 interest expense $5,000 $5,000 income before taxes $25,000 $40,000 income tax expense $7,500 $12,000 net income $17,500 $28,000

Explanation:

To solve this, we analyze each statement by calculating the percentage change or checking for no change using the income statement data (Q1 and Q2 values).

Analyzing Statement 1: "The new package had no effect on the revenue from Q1 to Q2."

Revenue in Q1: $\$120,000$, Q2: $\$150,000$. Since $120,000
eq 150,000$, revenue changed. So this statement is false.

Analyzing Statement 2: "The new package increased the revenue by 25% from Q1 to Q2."

Percentage change in revenue:
$$\text{Percentage Change} = \frac{\text{Q2 Revenue} - \text{Q1 Revenue}}{\text{Q1 Revenue}} \times 100$$
Substitute values:
$$\frac{150,000 - 120,000}{120,000} \times 100 = \frac{30,000}{120,000} \times 100 = 25\%$$
So revenue increased by 25%. This statement is true.

Analyzing Statement 3: "The new package increased the cost of goods sold by 25% from Q1 to Q2."

Cost of Goods Sold (COGS) in Q1: $\$30,000$, Q2: $\$37,500$.
Percentage change in COGS:
$$\frac{37,500 - 30,000}{30,000} \times 100 = \frac{7,500}{30,000} \times 100 = 25\%$$
So COGS increased by 25%. This statement is true.

Analyzing Statement 4: "The new package increased the operating income by 50% from Q1 to Q2."

Operating Income in Q1: $\$30,000$, Q2: $\$45,000$.
Percentage change in operating income:
$$\frac{45,000 - 30,000}{30,000} \times 100 = \frac{15,000}{30,000} \times 100 = 50\%$$
So operating income increased by 50%. This statement is true.

Final Answer:

The correct statements are:

• The new package increased the revenue by 25% from Q1 to Q2.
• The new package increased the cost of goods sold by 25% from Q1 to Q2.
• The new package increased the operating income by 50% from Q1 to Q2.

(Select these three options.)

Answer:

To solve this, we analyze each statement by calculating the percentage change or checking for no change using the income statement data (Q1 and Q2 values).

Analyzing Statement 1: "The new package had no effect on the revenue from Q1 to Q2."

Revenue in Q1: $\$120,000$, Q2: $\$150,000$. Since $120,000
eq 150,000$, revenue changed. So this statement is false.

Analyzing Statement 2: "The new package increased the revenue by 25% from Q1 to Q2."

Percentage change in revenue:
$$\text{Percentage Change} = \frac{\text{Q2 Revenue} - \text{Q1 Revenue}}{\text{Q1 Revenue}} \times 100$$
Substitute values:
$$\frac{150,000 - 120,000}{120,000} \times 100 = \frac{30,000}{120,000} \times 100 = 25\%$$
So revenue increased by 25%. This statement is true.

Analyzing Statement 3: "The new package increased the cost of goods sold by 25% from Q1 to Q2."

Cost of Goods Sold (COGS) in Q1: $\$30,000$, Q2: $\$37,500$.
Percentage change in COGS:
$$\frac{37,500 - 30,000}{30,000} \times 100 = \frac{7,500}{30,000} \times 100 = 25\%$$
So COGS increased by 25%. This statement is true.

Analyzing Statement 4: "The new package increased the operating income by 50% from Q1 to Q2."

Operating Income in Q1: $\$30,000$, Q2: $\$45,000$.
Percentage change in operating income:
$$\frac{45,000 - 30,000}{30,000} \times 100 = \frac{15,000}{30,000} \times 100 = 50\%$$
So operating income increased by 50%. This statement is true.

Final Answer:

The correct statements are:

• The new package increased the revenue by 25% from Q1 to Q2.
• The new package increased the cost of goods sold by 25% from Q1 to Q2.
• The new package increased the operating income by 50% from Q1 to Q2.

(Select these three options.)