E13-3 Preparing and Interpreting a Schedule for Horizontal and Vertical Analyses [LO 13-2, LO 13-3, LO 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 expe es, did Computer Tycoon earn more profit per dollar of sales in 2016 compared to 2015? Req 1 Req 2A Req 2B 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. (Decreases should be indicated by a minus sign. Round percentage values to 1 decimal place.) COMPUTER TYCOON, INC. Income Statements For the Year Ended December 31 2016 2015 Change in Dollars Percentage % Sales Revenue $ 117,000 $ 145,500 Cost of Goods Sold 68,500 % 78,300 67,200 % 40,400 % 560 % Gross Profit Selling, General, and Administrative Expenses Interest Expense Income before Income Tax Expense Income Tax Expense Net Income 48,500 37,700 670 10,130 2,500 7,630 $ % 26,240 6,700 % $ 19,540 % Req 1 Req 2A > Req 1 Reg 2A Req 2B Conduct a vertical analysis by expressing each line as a percentage of total revenues. (Round percentage values to 1 decimal place.) COMPUTER TYCOON, INC. Income Statements For the Year Ended December 31 2016 2015 Sales Revenue $ % $ 145,500 % Cost of Goods Sold 117,000 68,500 48,500 % 78,300 % Gross Profit % 67,200 37,700 % 40,400 670 % 560 Selling, General, and Administrative Expenses Interest Expense Income before Income Tax Expense Income Tax Expense % % % % 10,130 2,500 7,630 26,240 6,700 19,540 % % % Net Income $ $ % 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? Yes ONO