?PR $14-1$A$.$ ?Horizontal analysis of income statement

OBJ. $1$

For $2016,$ ?Clapton Company reported a decline in net income. At the end of the year, S$.$ ?Hand, the president, is presented with the following condensed comparative income statement:

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INSTRUCTIONS

Prepare a comparative income statement with horizontal analysis for the two$-$year period, using $2015$ ?as the base year. Round to one decimal place.

ANSWER

?To the extent the data permit, comment on the significant relationships revealed by the horizontal analysis prepared in $(1).$

PR $14-2$A$.$ ?Vertical analysis of income statement

OBJ. $1$

For $2016,$ ?Indigo Company initiated a sales promotion campaign that included the expenditure of an additional $$39,000$ ?for advertising. At the end of the year, Lumi Neer, the president, is presented with the following condensed comparative income statement:

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INSTRUCTIONS

Prepare a comparative income statement for the two$-$year period, presenting an analysis of each item in relationship to sales for each of the years. Round to one decimal place.

ANSWER

?To the extent the data permit, comment on the significant relationships revealed by the vertical analysis prepared in $(1).$