E13-3 (Algo) Preparing and Interpreting a Schedule for Horizontal and Vertical Analyses [LO 13-2, 13-3, 13-5] According to the producer price index database maintained by the Bureau of Labor Statistics, the average cost of computer equipment fell 3.8 percent between January and December 2016. Required: 1. Conduct a horizontal analysis by calculating the year-over-year changes in each line item, expressed in dollars and in percentages for the income statement of Computer Tycoon Inc. for the year ended December 31, 2016. 2-a. Conduct a vertical analysis by expressing each line as a percentage of total revenues. 2-b. Excluding income tax, interest, and operating expenses, did Computer Tycoon earn more profit per dollar of sales in 2016 compared to 2015? COMPUTER TYCOON, INC. Income Statements For the Year Ended December 31 2016 2015 Change in Dollars Percentage % Sales Revenue $ 105,000 $ 62,500 Cost of Goods Sold % 127,500 73,500 54,000 38,000 42,500 36,500 550 % % Gross Profit Selling, General, and Administrative Expenses Interest Expense Income before Income Tax Expense Income Tax Expense 500 % % 5,450 1,500 3,950 15,500 5,500 10,000 % Net Income $ $ % COMPUTER TYCOON, INC. Income Statements For the Year Ended December 31 2016 Sales Revenue $ % $ % Cost of Goods Sold % % 105,000 62,500 42,500 36,500 550 2015 127,500 73,500 54,000 38,000 500 % % % % % % Gross Profit Selling, General, and Administrative Expenses Interest Expense Income before Income Tax Expense Income Tax Expense Net Income % % 5,450 1,500 3,950 % 15,500 5,500 10,000 % $ % $ % Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Excluding income tax, interest, and operating expenses, did Computer Tycoon earn more profit per dollar of sales in 2016 compared to 2015? OYes Ono