For 2012, Greyhound Technology Company reported its most significant decline in net income in years. At the end of the year, Duane Vogel, the president, is presented with the following condensed comparative income statement:

Instructions
1. Prepare a comparative income statement with horizontal analysis for the two- year period, using 2011 as the base year. Round to one decimal place.
2. To the extent the data permit, comment on the significant relationships revealed by the horizontal analysis prepared in(1).

Transcribed Image Text:

GREYHOUND TECHNOLOGY COMPANY Comparative Income Statement For the Years Ended December 31, 2012 and 2011 2012 2011 Sales Sales returns and allowances Net sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Income from operations Other income Income before income t Income tax expense Net income $880,000 18,000 $862,000 650,000 $212,000 S 44,000 27,000 71,000 $141,000 2,300 $143,300 13,000 $130,300 $800,000 15,000 $785,000 500,000 $285,000 40,000 25,000 65,000 $220,000 2,000 $222,000 20,000 $202,000 ax