Prepare a comparative common-size income statement for Bright Tutoring Inc. using the 2020 and 2019 data found in E18–1. Round percentages to one-tenth of a percent.

E18–1

Prepare a horizontal analysis of the comparative income statement of Bright Tutoring Inc. Round percentage changes to the nearest one-tenth percent. Why was the percentage increase in net income higher than that in total revenue during 2020?

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BRIGHT TUTORING INC. Income Statement For the Years Ended December 31, 2020 and 2019 2020 2019 Net sales $533,000 $465,000 Expenses Cost of goods sold Selling and general expenses 235,000 202,000 140,000 135,000 Interest expense 10,000 6,000 Wages expense 51,000 41,000 Total expenses 436,000 384,000 Net income $ 97,000 $ 81,000