COOKIE & COFFEE CREATIONS INC.

Income Statement

Year Ended October 31

2014 2013 Difference Horizontal Analysis Vertical Analysis

Sales $485,625 $462,500

Cost of goods sold 222,694 208,125

Gross profit 262,931 254,375

Operating expenses

Salaries and wages expense 147,979 146,350

Depreciation expense 17,600 9,100

Other operating expenses 48,186 42,925

Total operating expenses 213,765 198,375

Income from operations 49,166 56,000

Other expenses

Interest expense 413 0

Loss on disposal of plant assets 2,500 0

Total other expenses 2,913 0

Income before income tax 46,253 56,000

Income tax expense 9,251 14,000

Net income $37,002 $42,000

Additional information:

Instructions

(a) Prepare a horizontal analysis of the income statement for Cookie & Coffee Creations Inc. for 2013 and 2014.

(b) Prepare a vertical analysis of the income statement for Cookie & Coffee Creations Inc. for 2013 and 2014.

(c) Prepare the Difference in the Cookie and Coffee Creations Inc. Income Statement For the Year Ended October 31