Laurie Llamos manages a Mexican restaurant in a rural Texas town. She wants to develop a comparative (horizontal) income statement so that she can compare the differences in her revenues, expenses, and profit from this year to last year. Complete the following comparative income statement.

Laurie’s Comparative Income Statement SALES:

Food 3,025,618 3,499,239 Total Sales ok ea COST OF SALES: a.a:

Beverage 144,849 Total Cost of Sales GROSS PROFIT:

Food poe Difference

%

Beverage Total Gross Profit OPERATINGEXPENSES: |s s Salaries and Wages Oral ave Employee Benefits | 138,828 167,720 Direct Operating Expenses 198,215 Music and Entertainment 11,436 Marketing 95,295 Utility Services 133,413 Repairs and Maintenance 53,366 Administrative and General 93,628 106,731 Occupancy 168,000 180,000 foe)i oe) oO o>) —_ Depreciation 58,114 ;
Total Operating Expenses Operating Income Interest 121,450 127,334 -
Income Before Income Taxes Income Taxes 261,315 313,850 Net Income

a. Laurie’s goal was to increase her total sales by 15%. Did she achieve this goal?

b. One of Laurie’s plans to increase traffic into her restaurant and thus increase her sales was to hire a mariachi band to play at regular intervals during the meal service. This affected her music and entertainment expense. What was the % difference in music and entertainment, and do you think this had a positive or negative effect on sales?

c. Laurie also wanted to increase her net income by 10%. Did she achieve this goal?