Chesire INC. had the folllowing condensed income statements for the years ending

Question

Chesire INC. had the folllowing condensed income statements for the years ending December 31, 2009 and 2008

Net sales revenue (2009) $500000 (2008) $400000
Cost of goods sold (2009) 200000 (2008) 150000
Gross profit (2009) $300000 (2008) $250000
Operating expense (2009) 100000 (2008) 110000
Income before taxes(2009) $200000 (2008) $140000
Income taxes (2009) 60000 (2008) 42000
Net income (2009) $140000 (2008) $98000

Using horizontal analysis, complete the comparative income statement by computing dollar change ($change) and percentage change (% change) Round percentages to two decimal places.

Explanation / Answer

Net sales revenue 100000 25% Cost of goods sold 50000 33.33% Gross profit 50000 20% Operating expense (10000) (0.09%) Income before taxes 60000 42.86% Income taxes 18000 42.86% Net income 42000 42.86% figures in bracket shows minus

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