Horizontal Analysis of the Income Statement

Income statement data for Montana Images Company for the years ended December 31, 20Y5 and 20Y4, are as follows:

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Hint(s)

a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for 20Y5 when compared with 20Y4. Round percentage answers to one decimal place.

Montana Images Company
Comparative Income Statement
For the Years Ended December 31, 20Y5 and 20Y4
20Y5 Amount	20Y4 Amount	Increase (Decrease) Amount	Increase (Decrease) Percent
Sales	$ 579000	$ 500000	$ Correct 11 of Item 1	% Correct 12 of Item 1
Cost of goods sold	343500	300000	Correct 16 of Item 1	% Correct 17 of Item 1
Gross profit	$ 235500	$ 200000	$ Correct 21 of Item 1	% Correct 22 of Item 1
Selling expenses	$ 46000	$ 40000	$ Correct 26 of Item 1	% Correct 27 of Item 1
Administrative expenses	11000	10000	Correct 31 of Item 1	% Correct 32 of Item 1
Total operating expenses	$ 57000	$ 50000	$ Correct 36 of Item 1	% Correct 37 of Item 1
Income before income tax	$ 178500	$ 150000	$ Correct 41 of Item 1	% Correct 42 of Item 1
Income tax expense	45000	37500	Correct 46 of Item 1	% Correct 47 of Item 1
Net income	$ 133500	$ 112500	$ Correct 51 of Item 1	% Correct 52 of Item 1