Calendar Long Company had the following income statement to be used in horizonta

ID: 2592009 • Letter: C

Question

Calendar Long Company had the following income statement to be used in horizontal analysis: 2016 2015 Sales Cost of Goods Sold Gross Profit Operating Expenses Income Before Taxes Income Tax Expense Net Income 900,000 $1,000,000 600,000 400,000 240,000 160,000 56,000 486,000 414,000 235,900 178,100 62,335 $105,765 | $104,000 Required: Examine income before taxes and compute the following. Indicate for each whether the change is an increase or a decrease 1. Compute the change in dollar amount from 2015 to 2016 2. Compute the percentage change from 2015 to 2016. Round your answer to two decimal places. Increase or Decrease Amount of rcent of Change Change Increase O Decrease SD 0% Clear Undo Help Next >> Explain Type here to search

Explanation / Answer

Long Company

2015

2016

Change -Increase

Income before taxes

$160,000

$178,100

$18,100

percent of change

11.31%

The income before taxes posted an increase of 18,100 from the year 2015 to the year 2016 as shown below,

$178,100 - $160,000 = $18,100

The increase in income before taxes from 2015 to 2016 is 11.31% as shown below,

($18,100/$160,000) x 100 = 11.31%