Question

Here are the comparative income statements of Ayayai Corp..

AYAYAI CORP. Comparative Income Statement For the Years Ended December 31
		2017		2016
Net sales		$600,000		$500,000
Cost of goods sold		445,000		400,000
Gross Profit		155,000		100,000
Operating expenses		70,000		40,000
Net income		$ 85,000		$ 60,000

(a)

Prepare a horizontal analysis of the income statement data for Ayayai Corp., using 2016 as a base. (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000), (20%). Round percentages to 1 decimal place, e.g. 12.1%.)

AYAYAI CORP. Comparative Income Statement                                                                       For the Years Ended December 31December 31For the Month Ended December 31
					Increase or (Decrease) During 2017
	2017		2016		Amount		Percentage
Net sales	$600,000		$500,000		$			%
Cost of goods sold	445,000		400,000					%
Gross Profit	155,000		100,000					%
Operating expenses	70,000		40,000					%
Net income	$ 85,000		$ 60,000		$			%

Answer 1

Solution:

AYAYAI CORP.
Comparative Income Statement
For the Years Ended December 31 December 31
			Increase or (Decrease) During 2017
	2017	2016	Amount	Percentage
Net sales	$600,000.00	$500,000.00	$100,000.00	20.0%
Cost of goods sold	$445,000.00	$400,000.00	$45,000.00	11.3%
Gross Profit	$155,000.00	$100,000.00	$55,000.00	55.00%
Operating expenses	$70,000.00	$40,000.00	$30,000.00	75.0%
Net income	$85,000.00	$60,000.00	$25,000.00	41.7%