OBJ. 1EX 15-5Horizontal analysis of the income statementIncome statement data for Moreno Company for two recent years ended December 31,are as follows:meCurrent YearPrevious Year$1,120,000$1,000,000Sales875,000$ 125,000971,250Cost of goods soldGross profitSelling expensesAdministrative expenses$ 148,7502$71,25062,50050,00056,000$ 127,250Isso$ 21,500$ 112,500Total operating expensesIncome before income tax12,500000,01228,0005,000Income tax expense13,500%247,50000000Net incomea. Prepare a comparative income statement with horizontal analysis, indicating the in-crease (decrease) for the current year when compared with the previous year. Roundto one decimal place.00000000.0/b.What conclusions can be drawn from the horizontal analysis?

An income statement is the one that is prepared to calculate net income/loss by considering revenue…

OBJ. 1 EX 15-5 Horizontal analysis of the income statement Income statement data for Moreno Company for two recent years ended December 31, are as follows: Current Year Previous Year $1,120,000 $1,000,000 Sales 875,000 $ 125,000 $ 62,500 971,250 Cost of goods sold Gross profit Selling expenses Administrative expenses $ 148,750 $ 71,250 56,000 50,000 $ 127,250 2$ $112,500 Total operating expenses Income before income tax $ 12,500 5,000 %24 21,500 8,000 Income tax expense 24 13,500 7,500 000 Net income a. Prepare a comparative income statement with horizontal analysis, indicating the in- crease (decrease) for the current year when compared with the previous year. Round to one decimal place. b. What conclusions can be drawn from the horizontal analysis?

OBJ. 1 EX 15-5 Horizontal analysis of the income statement Income statement data for Moreno Company for two recent years ended December 31, are as follows: Current Year Previous Year $1,120,000 $1,000,000 Sales 875,000 $ 125,000 $ 62,500 971,250 Cost of goods sold Gross profit Selling expenses Administrative expenses $ 148,750 $ 71,250 56,000 50,000 $ 127,250 2$ $112,500 Total operating expenses Income before income tax $ 12,500 5,000 %24 21,500 8,000 Income tax expense 24 13,500 7,500 000 Net income a. Prepare a comparative income statement with horizontal analysis, indicating the in- crease (decrease) for the current year when compared with the previous year. Round to one decimal place. b. What conclusions can be drawn from the horizontal analysis?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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