E13-3 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 8.1 percent between 2012 and 2013. 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, 2013. (Decreases should be indicated by a minus sign. Round your percentage answers to 1 decimal place.) COMPUTER TYCOON, INC. Income Statements For the Year Ended December 31 Change in 2013 2012 Dollars S 100,000 S 120,000 71,500 48,500 37,000 475 11,025 5,000 S 2,500 S 6,025 Sales Revenue Cost of Goods Sold Gross Profit Selling, General, and Administrative Expenses Interest Expense Income before Income Tax Expense Income Tax Expense Net Income 60,000 40,000 36,000 500 3,500 1,000 2-a. Conduct a vertical analysis by expressing each line as a percentage of total revenues. (Round your percentage answers to 1 decimal place.) COMPUTER TYCOON, INC Income Statements For the Year Ended December 31 2013 2012 % | 120,000 71,500 48,500 37,000 475 11,025 5,000 % $ 6,025 Sales Revenue Cost of Goods Sold Gross Profit Selling, General and Administrative Expenses Interest Expense Income before Income Tax Expense Income Tax Expense Net Income 100,000 60,000 40,000 36,000 3,500 1,000 $ 2,500 2-b. Excluding income tax, interest, and operating expenses, did Computer Tycoon earn more profit per dollar of sales in 2013 compared to 2012? Yes No