FINANCIAL AND MANAGERIAL ACCOUNTING
13th Edition
ISBN: 9781337816045
Author: WARREN
Publisher: CENGAGE L
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Chapter 2, Problem 2.8BPE
To determine
Horizontal analysis of income statement:
In horizontal analysis of income statement, the amount of each item of the current year financial statement is compared with the previous year financial statement. The amount of each item increased or decreased in the current income statement, and its respective percentage can be computed by taking the earlier statement as the base.
To prepare: A horizontal analysis of P Company’s income statement.
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Here are the comparative income statements of Cullumber Corporation.
CULLUMBER CORPORATIONComparative Income StatementFor the Years Ended December 31
2022
2021
Net sales
$639,400
$578,200
Cost of goods sold
464,800
433,400
Gross Profit
174,600
144,800
Operating expenses
70,500
43,000
Net income
$ 104,100
$ 101,800
(a)Prepare a horizontal analysis of the income statement data for Cullumber Corporation, using 2021 as a base. (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000), (20%). Round percentages to 1 decimal place, e.g. 12.1%.)
CULLUMBER CORPORATIONComparative Income Statementchoose the accounting period For the Years Ended December 31For the Month Ended December 31December 31
Increase or (Decrease) During 2022
2022
2021
Amount
Percentage
Net…
The comparative condensed income statements of Emley Corporation are shown below.
EMLEY CORPORATIONComparative Condensed Income StatementsFor the Years Ended December 31
2017
2016
Net sales
$726,000
$661,000
Cost of goods sold
531,300
462,000
Gross profit
194,700
199,000
Operating expenses
137,500
132,000
Net income
$ 57,200
$ 67,000
(a)Prepare a horizontal analysis of the income statement data for Emley Corporation using 2016 as a base. (Enter negative amounts and percentages using either a negative sign preceding the number e.g. -45, -45% or parentheses e.g. (45), (45%). Round percentages to 1 decimal place, e.g. 12.3%.)
EMLEY CORPORATIONCondensed Income Statements
Increase or (Decrease)During 2017
2017
2016
Amount
Percentage
Net sales
$726,000
$661,000
$
%
Cost of goods sold
531,300
462,000
%
Gross profit…
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Here are the comparative income statements of Oriole Corporation.
ORIOLE CORPORATIONComparative Income StatementFor the Years Ended December 31
2022
2021
Net sales
$632,300
$544,800
Cost of goods sold
456,600
415,500
Gross Profit
175,700
129,300
Operating expenses
74,100
44,500
Net income
$ 101,600
$ 84,800
(a)Prepare a horizontal analysis of the income statement data for Oriole Corporation, using 2021 as a base. (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000), (20%). Round percentages to 1 decimal place, e.g. 12.1%.)
ORIOLE CORPORATIONComparative Income Statementchoose the accounting period For the Years Ended December 31For the Month Ended December 31December 31
Increase or (Decrease) During 2022
2022
2021…
Chapter 2 Solutions
FINANCIAL AND MANAGERIAL ACCOUNTING
Ch. 2 - What is the difference between an account and a...Ch. 2 - Prob. 2DQCh. 2 - Prob. 3DQCh. 2 - eCatalog Services Company performed services in...Ch. 2 - If the two totals of a trial balance are equal,...Ch. 2 - Assume that a trial balance is prepared with an...Ch. 2 - Prob. 7DQCh. 2 - Assume that Muscular Consulting erroneously...Ch. 2 - Assume that Sunshine Realty Co. borrowed 300,000...Ch. 2 - Checking accounts are one of the most common forms...
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