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Exercise 13-6 Here are the comparative income statements of Bridgeport Corp.. BRIDGEPORT CORP. Comparative Income Statement FPrepare a horizontal analysis of the income statement data for Bridgeport Corp., using 2018 as a base. (If amount and percent(b) Prepare a vertical analysis of the income statement data for Bridgeport Corp. for both years. (Round percentages to 1 dec

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a. Horizontal analysis of income statement, difference between current year and base year is taken and such difference is divided by base year number,

Current year = 2019 year figures

Base year = 2018 year figures

BRIDGEPORT CORP.
Comparative iNcome statement
Increase/ Decrease during 2019
2019 2018 Amount (2019-2018) calculation Percentage (2019-2018)/2018 calculation
Net Sales 636000 530000 106000 636000-530000 20.0% 106000/530000
Cost of goods sold 497988 458450 39538 497988-458450 8.6% 39538/458450
Gross Profit 138012 71550 66462 138012-71550 92.9% 66462/71550
Operating expenses 90312 45050 45262 90312-45050 100.5% 45262/45050
Net Income 47700 26500 21200 47700-26500 80.0% 21200/26500


B. In Vertical analysis , each line item is divided with net sales to arrive at the percentage.b.

BRIDGEPORT CORP.
Comparative income statement
2019 Percentage 2018 Percentage
Net Sales 636000 100.0% 636000/636000 530000 100.0% 530000/530000
Cost of goods sold 497988 78.3% 497988/636000 458450 86.5% 458450/530000
Gross Profit 138012 21.7% 138012/636000 71550 13.5% 71550/530000
Operating expenses 90312 14.2% 90312/636000 45050 8.5% 45050/530000
Net Income 47700 7.5% 47700/636000 26500 5.0% 26500/530000
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