Bellingham Industries, a manufacturer of the furniture industry, had the following financial performance for the last two years as shown on their income statements below: Billingham Industries, Inc. Comparative Income Statement For the Years Ended December 31, 2021 and 2020 2021 2020 Amount Amount Sales $1,280,000 $1,180,000 Cost of goods sold 644,800 613,600 Gross profit 635,200 566,400 Selling expenses 230,500 188,800 Administrative expenses 182,500 177,000 Total operating expenses 413,000 365,800 Income from operations 222,200 200,600 Other income 77,000 70,800 Income before income tax 299,200 271,400 Income tax expense 121,600 106,200 Net income $177,600 $165,200 1. Prepare a horizontal analysis using the form provided to the right. 2. What line item jumps off the page as the most negative change year to year considering the sales growth? 3. What line item jumps off the page as the most positive change year to year considering the sales growth?

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter9: Metric-analysis Of Financial Statements

Section: Chapter Questions

Problem 9.2.1P

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Bellingham Industries, a manufacturer of the furniture industry, had the following
financial performance for the last two years as shown on their income statements below:

Billingham Industries, Inc.
Comparative Income Statement
For the Years Ended December 31, 2021 and 2020
		2021	2020
		Amount	Amount
	Sales	$1,280,000	$1,180,000
	Cost of goods sold	644,800	613,600
	Gross profit	635,200	566,400
	Selling expenses	230,500	188,800
	Administrative expenses	182,500	177,000
	Total operating expenses	413,000	365,800
	Income from operations	222,200	200,600
	Other income	77,000	70,800
	Income before income tax	299,200	271,400
	Income tax expense	121,600	106,200
	Net income	$177,600	$165,200


1. Prepare a horizontal analysis using the form provided to the right.
2. What line item jumps off the page as the most negative change year to year
considering the sales growth?
3. What line item jumps off the page as the most positive change year to year
considering the sales growth?

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