EX 14-5 Horizontal analysis of the income statement Income statement data for Winthrop Company for two recent years ended December 31 are as follows: Current Year Previous Year $ 2,000,000 $ 2,240,000 (1,925,000) 5 315,000 S (152,500) Sales Cost of goods sold Gross profit Selling expenses Administrative expenses (1,750,000) $ 250,000 S (125,000) (118,000) S (270,500) $ (225,000) 25,000 Total operating expenses %24 Income before income tax expense %24 (17,800) 44,500 Income tax expense Net income %24 26,700 15,000 a. Prepare a comparative income statement with horizontal analysis, indicating the increase one decimal place. (decrease) for the current year when compared with the previous year. Round percentages to b. What conclusions can be drawn from the horizontal analysis?
EX 14-5 Horizontal analysis of the income statement Income statement data for Winthrop Company for two recent years ended December 31 are as follows: Current Year Previous Year $ 2,000,000 $ 2,240,000 (1,925,000) 5 315,000 S (152,500) Sales Cost of goods sold Gross profit Selling expenses Administrative expenses (1,750,000) $ 250,000 S (125,000) (118,000) S (270,500) $ (225,000) 25,000 Total operating expenses %24 Income before income tax expense %24 (17,800) 44,500 Income tax expense Net income %24 26,700 15,000 a. Prepare a comparative income statement with horizontal analysis, indicating the increase one decimal place. (decrease) for the current year when compared with the previous year. Round percentages to b. What conclusions can be drawn from the horizontal analysis?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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