Horizontal Analysis of the Income Statement Income statement data for Boone Comp
ID: 2498712 • Letter: H
Question
Horizontal Analysis of the Income Statement Income statement data for Boone Company for the years ended December 31, 2014 and 2013, are as follows:
2014 2013
Sales $430,500 $350,000
Cost of goods sold 363,000 300,000
Gross profit $67,500 $50,000
Selling expenses $19,210 $17,000
Administrative expenses 16,940 14,000
Total operating expenses $36,150 $31,000
Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for 2014 when compared with 2013. If required, round to one decimal place. Enter all amounts as positive numbers.
2014 Amount
2013 Amount
Increase (Decrease) Amount
Increase (Decrease) Percent
Sales
$ 430,500
$ 350,000
$
%
Cost of goods sold
363,000
300,000
%
Gross profit
$ 67,500
$ 50,000
$
%
Selling expenses
$ 19,210
$ 17,000
$
%
Administrative expenses
16,940
14,000
%
Total operating expenses
$ 36,150
$ 31,000
$
%
Income before income tax
$ 31,350
$ 19,000
$
%
Income tax expense
12,500
7,600
%
Net income
$ 18,850
$ 11,400
$
%
Income before income tax $31,350 $19,000 Income tax expenses 12,500 7,600 Net income $18,850 $11,400Explanation / Answer
Answer:
Comparative Income Statement
2014 Amount 2013 Amount Increase (Decrease) Amount Increase (Decrease) Percent Sales $430,500 $350,000 $80,500 23.00% Cost of goods sold $363,000 $300,000 $63,000 21.00% Gross profit $67,500 $50,000 $17,500 35.00% Selling expenses $19,210 $17,000 $2,210 13.00% Administrative expenses $16,940 $14,000 $2,940 21.00% Total operating expenses $36,150 $31,000 $5,150 16.61% Income before income tax $31,350 $19,000 $12,350 65.00% Income tax expense $12,500 $7,600 $4,900 64.47% Net income $18,850 $11,400 $7,450 65.35%Related Questions
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