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The following comparative statement of income for Lemongrass Industries Ltd. was reported for the years ended November 30, 2021 and 2022. 2021 $215,800 86,325 129,475
The following comparative statement of income for Lemongrass Industries Ltd. was reported for the years ended November 30, 2021 and 2022. 2021 $215,800 86,325 129,475 Lemongrass Industries Ltd. Statement of Income Years Ended November 30, 2022 Sales $250,170 Cost of sales 119,840 Gross profit 130,330 Operating expenses Salaries expense 38,500 Depreciation expense 7,800 Utilities expense 4,250 Insurance expense 4,125 Advertising expense 1,245 Total operating expenses 55,920 Income from operations 74,410 Other income and expenses Interest expense (4,570) Other income 500 Income before income tax 70,340 Income tax expense 15,050 Net income $55,290 35,500 6,500 3,860 4,025 45,125 95,010 34,465 (3,250) 120 31,335 5,150 $26,185 Prepare a horizontal and vertical analysis on Lemongrass Industries Ltd's statement of income. (Round percentage answers to 1 decimal place, e.g. 52.7. Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) HORIZONTAL ANALYSIS Lemongrass Industries Ltd. Statement of Income Years Ended November 30, 2021 $ Change $215,800 $ % Change 2022 $250,170 Sales % 119,840 86,325 % 130,330 129.475 % 38,500 35,500 7.800 6,500 % 4.250 3.860 % 4,125 4,025 % 1.245 45,125 Cost of sales Gross profit Operating expenses Salaries expense Depreciation expense Utilities expense Insurance expense Advertising expense Total operating expenses Income from operations Other income and expenses Interest expense Other income Income before income tax Income tax expense Net income 55.920 95.010 % 74,410 34,465 (4,570) (3.250) 500 120 % 70,340 31.335 % 15,050 5,150 % $55,290 $26,185 $ % VERTICAL ANALYSIS Lemongrass Industries Ltd. Income Statement Years Ended November 30, % of Net Sales 2021 % $215,800 2022 % of Net Sales Sales $250.170 % Cost of sales 119,840 % 86,325 % 130.330 129,475 % 38.500 % 35,500 % 7,800 % 6.500 % 4.250 % 3.860 % 4.125 % 4,025 % 1.245 % 45.125 % Gross profit Operating expenses Salaries expense Depreciation expense Utilities expense Insurance expense Advertising expense Total operating expenses Income from operations Other income and expenses Interest expense Other income Income before income tax Income tax expense 55,920 % 95,010 % 74,410 34,465 % (4.570) % (3,250) % 500 120 % 70,340 % 31,335 % 15.050 % 5,150 % Net income $55,290 % $26,185 %
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