Explanation Given Information: The incomplete balance sheet is provided as bellow: Income statement Increase/decrease Revenue 2017($) 2016($) Amount Percent Total sales 291,707 275,873 Sales return and allowance 5,896 6,821 Net sales Cost of goods sold Beginning inventory on January 1 35,892 32,587 Purchases 157,213 146,999 Ending inventory, December 31 32,516 30,013 Cost of goods sold Gross profit from sales Operating expenses Salary 42,000 40,000 Insurance 3,800 3,800 Utilities 1,986 2,097 Rent 3,600 3,300 Depreciation 4,000 4,500 Total operating expenses Net income Calculation: Consider the provided income statement, In order to complete the horizontal analysis of the income statement, Find the increase/decrease of each item and then the percent of each increase and decrease, Total sales: Increase/decrease = $ 291707 − $ 275873 = $ 15834 Percent of change = $ 15834 $ 275873 × 100 = 5.7 % Sales return and allowance: Increase/decrease = $ 5896 − $ 6821 = ( $ 925 ) Percent of change = $ 925 $ 9821 × 100 = 13.6 % Net sales: Increase/decrease = $ 285811 − $ 269052 = $ 16759 Percent of change = $ 16759 $ 269052 × 100 = 6.2 % Beginning inventory: Increase/decrease = $ 35892 − $ 32587 = $ 3305 Percent of change = $ 3305 $ 32587 × 100 = 10.1 % Purchases: Increase/decrease = $ 157213 − 146999 = $ 10214 Percent of change = $ 10214 $ 146999 × 100 = 6.9 % Ending inventory: Increase/decrease = $ 32516 − $ 30013 = $ 11016 Percent of change = $ 2503 $ 30013 × 100 = 8.3 % Cost of the goods sold: Increase/decrease = $ 160589 − $ 149573 = $ 11016 Percent of change = $ 11016 $ 149576 × 100 = 7.4 % Gross profit from sales: Increase/decrease = $ 125222 − $ 119479 = $ 5743 Percent of change = $ 5743 $ 119479 × 100 = 4

11th Edition

ISBN: 8220103632072

Author: NOBLE

Publisher: Pearson Education (US)

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Chapter 21, Problem 7ES

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To calculate: The missing values in the horizontal analysis of income statement of Alonzo’s Auto Parts.

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The missing values in the horizontal analysis of income statement of Alonzo’s Auto Parts.

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