14-6 Horizontal Analysis of the Income Statement

Income statement data for Boone Company for two recent years ended December 31, are as follows:

	Current Year			Previous Year
Sales	$787,200			$640,000
Cost of goods sold	660,000			550,000
Gross profit	$127,200			$90,000
Selling expenses	$36,160			$32,000
Administrative expenses	32,670			27,000
Total operating expenses	$68,830			$59,000
Income before income tax	$58,370			$31,000
Income tax expenses	23,300			12,400
Net income	$35,070			$18,600

a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. If required, round to one decimal place.

Boone Company
Comparative Income Statement
For the Years Ended December 31
	Current year Amount	Previous year Amount	Increase (Decrease) Amount	Increase (Decrease) Percent
Sales	$787,200	$640,000	$	%
Cost of goods sold	660,000	550,000		%
Gross profit	$127,200	$90,000	$	%
Selling expenses	36,160	32,000		%
Administrative expenses	32,670	27,000		%
Total operating expenses	$68,830	$59,000	$	%
Income before income tax	$58,370	$31,000	$	%
Income tax expense	23,300	12,400		%
Net income	$35,070	$18,600	$	%