he following is summary of information presented on the financial statements of a company on December...
he following is summary of information presented on the financial statements of a company on December 31, 2015. Account 2015 2014 Net Sales Revenue $600,000 $500,000 Cost of Goods Sold 450,000 400,000 Gross Profit $150,000 $100,000 Selling Expenses 50,000 50,000 Net income before income tax expense $100,000 $50,000 Income tax expense 35,000 18,000 Net Income $65,000 $32,000
What would a horizontal analysis report show with respect to net income?
|
both net income before income tax expense and net income are 45.45% of net sales revenue |
||
|
a $25,000 increase in net income |
||
|
a 45.45% increase in net income |
||
|
a 103% increase in net income |
Homework Answers
Changes in net income :
2014 net income = 32000
2015 net income = 65000
Increase in net income = 65000-32000 = 33000
Changes in percentage = 33000*100/32000 = 103%
so answer is d) a 103% increase in net income
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Prepare a pro forma income statement for 2015 using the
percent-of-sales method and distinguish between fixed and variable
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