Business, 05.05.2020 21:16 56340

Moreno Company Comparative Income Statement For the Years Ended December 31, 20-- 1 Current Year Previous Year

2Sales $1,120,000.00 $1,000,000.00

3 Cost of goods sold 971,250.00 875,000.00

4 Gross profit $148,750.00 $125,000.00

5 Selling expenses $71,250.00 $62,500.00

6 Administrative expenses 56,000.00 50,000.00

7 Total operating expenses $127,250.00 $112,500.00

8 Income before income tax $21,500.00 $12,500.00

9 Income tax expense 8,000.00 5,000.00

10 Net income $13,500.00 $7,500.00

Required: A. Prepare a comparative income statement with horizontal analysis for the two-year period, indicating the increase (decrease) for the current year when compared with the previous year. Use the minus sign to indicate an amount or percent decrease. If required, round percentages to one decimal place. B. What conclusions can be drawn from the horizontal analysis?

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