Question

Instructions

Income statement data for Moreno Company for two recent yearsended December 31, are as follows:

Moreno Company

Comparative Income Statement

For the Years Ended December 31, 20--

1		Current Year	Previous Year
2	Sales	$1,948,800.00	$1,740,000.00
3	Cost of goods sold	1,674,750.00	1,522,500.00
4	Gross profit	$274,050.00	$217,500.00
5	Selling expenses	$71,875.00	$62,500.00
6	Administrative expenses	51,520.00	46,000.00
7	Total operating expenses	$123,395.00	$108,500.00
8	Income before income tax	$150,655.00	$109,000.00
9	Income tax expense	13,398.00	8,700.00
10	Net income	$137,257.00	$100,300.00

	Required:
A.	Prepare a comparative incomestatement with horizontal analysis for the two-year period,indicating the increase (decrease) for the current year whencompared with the previous year. Use the minus sign to indicate anamount or percent decrease. If required, round percentages to onedecimal place.
B.	What conclusions can be drawnfrom the horizontal analysis?

X

Income Statement

Prepare a comparative income statement with horizontal analysisfor the two-year period, indicating the increase (decrease) for thecurrent year when compared with the previous year. Use the minussign to indicate an amount or percent decrease. If required, roundpercentages to one decimal place.

Moreno Company

Comparative Income Statement

For the Years Ended December 31, 20--

1				Increase (Decrease)	Increase (Decrease)
2		Current Year	Previous Year	Amount	Percent
3	Sales	$1,948,800.00	$1,740,000.00
4	Cost of goods sold	1,674,750.00	1,522,500.00
5	Gross profit	$274,050.00	$217,500.00
6	Selling expenses	$71,875.00	$62,500.00
7	Administrative expenses	51,520.00	46,000.00
8	Total operating expenses	$123,395.00	$108,500.00
9	Income before income tax	$150,655.00	$109,000.00
10	Income tax expense	13,398.00	8,700.00
11	Net income	$137,257.00	$100,300.00