The income statements for Anything Tennis for the years ending December 31, 2018

Question

The income statements for Anything Tennis for the years ending December 31, 2018 and 2017, are provided below Required 1. Complete the "Amount" and "%" columns to be used in a horizontal analysis of the income statements for Anything Tennis. (Decreases should be indicated by a minus sign. Round your percentage answers to 1 decimal place.) ANYTHING TENNIS Income Statements For the Years Ended December 31 Increase (Decrease) 2018 2017 Amount Net sales $ 3,500,000$2,620,000 1,380,000 1,240,000 630,000 610,000 6,000 616,000 140,000 $ 450,000$ 476,000 2,150,000 1,350,000 810,000 540,000 10,000 550,000 100,000 Cost of goods sold Gross proft Operating expenses Operating income Other income (expense) Income before tax Income tax expense Net income

Explanation / Answer

Horizontal analysis 2017 2018 Change % change Sales 2620000 3500000 880000 33.6% Cost of goods sold 1380000 2150000 770000 55.8% Gross profit 1240000 1350000 110000 8.9% Operating expense 630000 810000 180000 28.6% Operating income 610000 540000 -70000 -11.5% Other income (expense) 6000 10000 4000 66.7% Income before taxes 616000 550000 -66000 -10.7% Income tax expense 140000 100000 -40000 -28.6% Net income (loss) 476000 450000 -26000 -5.5%

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