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Fri Dec 15 3 and learning resource from Cengage Learning rn/takeAssignment/printUntakenAssignment.dotassignmentid-698018 CengageNowv2 | Online teaching and learning resource from Cengage Leaming 4. EX.14-05 ALGO (Algorithmic) eBook Show He How Horizontal Analysis of the Income Statement Income statement data for Boone Company for two recent years ended December 31, are as follows Current Year $503,100 431,800 $71,300 $21,420 19,050 $40,470 $30,830 12,300 Previous Year Sales 390,000 340,000 50,000 $18,000 15,000 $33,000 $17,000 Cost of goods sold Gross profe Seling expenses Administrative expenses Total operating expenses Income before income tax Income tax expenses $10,200 Net income . Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when previous year. If required, round to one decimal Boone Company Comparative Income Statement Current year Amount Previous year Amount Increase (Decrease) Amount Increase (Decrease) Percent 503,100 $390,000 340,000 Cost of goods soid31.800

Explanation / Answer

(a) Comparative Income statement Boone Company Comparative Income Statement for the years ended december 31 Current year previous year Icrese/(decrese)amount Increse /(decrese) Persent sales 503100 390000 113100 29.0% 113100/390000 cost of goods sold 431800 340000 91800 27.0% 91800/340000 Gross profit 71300 50000 21300 42.6% 21300/50000 Selling Expenses 21420 18000 3420 19.0% 3420/18000 Adminstrative Expenses 19050 15000 4050 27.0% 4050/15000 Total operatinvg expenses 40470 33000 7470 22.6% 7470/33000 Income beofre income tax 30830 17000 13830 81.4% 13830/17000 income tax expense 12300 6800 5500 80.9% 5500/6800 Net income 18530 10200 8330 81.7% 8330/10200 (b) The Net Income for Boone company by incresed by 81.7% between years. This Increse was combined result of an Increse in sales of 29% and 27 Persentage of increse in cost of goods sold. The cost of goods sold incresed at a lower rate then increse in sales , thus causing the persentage of increse in gross profit to be higher then the persenatge increse in sales

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