Horizontal Analysisof the Income Statement

Income statement data for Boone Company for the years ended December 31, 2014 and 2013, are as follows:

	2014		2013
Sales	$620,400			$470,000
Cost of goods sold	516,000			400,000
Gross profit	$104,400			$70,000
Selling expenses	$31,720			$26,000
Administrative expenses	28,600			22,000
Total operating expenses	$60,320			$48,000
Income before income tax	$44,080			$22,000
Income tax expenses	17,600			8,800
Net income	$26,480			$13,200

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a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for 2014 when compared with 2013. If required, round to one decimal place. Enter all amounts as positive numbers.

Boone Company
Comparative Income Statement
For the Years Ended December 31, 2014 and 2013
2014 Amount	2013 Amount	Increase (Decrease) Amount	Increase (Decrease) Percent
Sales	$620,400	$470,000	$	%
Cost of goods sold	516,000	400,000		%
Gross profit	$104,400	$70,000	$	%
Selling expenses	$31,720	$26,000	$	%
Administrative expenses	28,600	22,000		%
Total operating expenses	$60,320	$48,000	$	%
Income before income tax	$44,080	$22,000	$	%
Income tax expense	17,600	8,800		%
Net income	$26,480	$13,200	$	%

b. The net income for Boone Company increased by 100.6% from 2013 to 2014. This increase was the combined result of anSelectincreasedecreaseCorrect 1 of Item 2in sales of 32% andSelecthigherlowerCorrect 2 of Item 2percentageSelectincreasesdecreasesCorrect 3 of Item 2in total operating expenses.