IA8 Problem 9-A (a)

Income Statement (Horizontal) report with a run date of 12/31-. Provide a narrative analysis of this report.

Income Stmt. Horizontal Analysis
For Years Ended 12/31/17 and 12/31/18
	Current	Previous
	Period	Period	Change	Percent
Operating Revenue
Sales	869,695.50	836,490.00	33,205.50	3.97
Sales Returns & Allow.	-9,150.00	-6,000.00	-3,150.00	52.5
Sales Discounts	-7,154.01	-3,595.00	-3,559.01	99
	-------------	-------------	-------------	----------
Total Operating Revenue	853,391.49	826,895.00	26,496.49	3.2
Cost
Cost of Merchandise Sold	592,660.00	593,255.00	-595	-0.1
	-------------	-------------	-------------	----------
Total Cost	592,660.00	593,255.00	-595	-0.1
	-------------	-------------	-------------	----------
Gross Profit	260,731.49	233,640.00	27,091.49	11.6
Operating Expenses
Sales Salaries Expense	74,368.94	63,873.10	10,495.84	16.43
Advertising Expense	13,750.00	11,500.00	2,250.00	19.57
Depr. Exp. Store Eqpt.	3,935.00	2,960.00	975	32.94
Insurance Expense Selling	4,595.00	3,350.00	1,245.00	37.16
Store Supplies Expense	820.32	1,729.30	-908.98	-52.56
Misc. Selling Expense	850	1,525.00	-675	-44.26
	-------------	-------------	-------------	----------
Selling Expenses	98,319.26	84,937.40	13,381.86	15.76
Office Salaries Expense	20,386.61	20,377.00	9.61	0.05
Utilities Expense	8,991.47	8,776.72	214.75	2.45
Depr. Exp. Building	19,000.00	17,000.00	2,000.00	11.76
Depr. Exp. Office Eqpt.	2,020.00	1,135.00	885	77.97
Insurance Expense General	2,500.00	1,800.00	700	38.89
Office Supplies Expense	1,503.74	613.4	890.34	145.15
Misc. General Expense	400	415	-15	-3.61
	-------------	-------------	-------------	----------
Administrative Expenses	54,801.82	50,117.12	4,684.70	9.35
	-------------	-------------	-------------	----------
Total Operating Expenses	153,121.08	135,054.52	18,066.56	13.38
	-------------	-------------	-------------	----------
Net Income from Operations	107,610.41	98,585.48	9,024.93	9.15
Other Revenue
Interest Income	815.5	1,833.00	-1,017.50	-55.51
Gain on Sale Office Eqpt.		130	-130	-100
Gain on Sale Store Eqpt.	65		65	100
Other Expense
Interest Expense	10,779.80	6,211.14	4,568.66	73.56
	-------------	-------------	-------------	----------
Net Income before Income Tax	97,711.11	94,337.34	3,373.77	3.58
Income Tax
Corporate Income Tax	26,800.00	24,872.00	1,928.00	7.75
	-------------	-------------	-------------	----------
Net Income after Income Tax	70,911.11	69,465.34	1,445.77	2.08
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