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 choose the accounting period                                                          December 31For the Month Ended December 31For the Years Ended December 31
					Increase or (Decrease) During 2017
	2017		2016		Amount		Percentage
Net sales	$600,000		$500,000		$enter a dollar amount		enter percentages rounded to 1 decimal place	%
Cost of goods sold	445,000		400,000		enter a dollar amount		enter percentages rounded to 1 decimal place	%
Gross Profit	155,000		100,000		enter a dollar amount		enter percentages rounded to 1 decimal place	%
Operating expenses	70,000		40,000		enter a dollar amount		enter percentages rounded to 1 decimal place	%
Net income	$ 85,000		$ 60,000		$enter a dollar amount		enter percentages rounded to 1 decimal place	%

b)

Prepare a vertical analysis of the income statement data for Ayayai Corp. for both years. (Round percentages to 1 decimal place, e.g. 12.1%.)

AYAYAI CORP. Condensed Income Statements choose the accounting period                                                          December 31For the Years Ended December 31For the Month Ended December 31
	2017					2016
	$		Percent			$		Percent
Net sales	$600,000		enter percentages rounded to 1 decimal place	%		$500,000		enter percentages rounded to 1 decimal place	%
Cost of goods sold	445,000		enter percentages rounded to 1 decimal place	%		400,000		enter percentages rounded to 1 decimal place	%
Gross Profit	155,000		enter percentages rounded to 1 decimal place	%		100,000		enter percentages rounded to 1 decimal place	%
Operating expenses	70,000		enter percentages rounded to 1 decimal place	%		40,000		enter percentages rounded to 1 decimal place	%
Net income	$ 85,000		enter percentages rounded to 1 decimal place	%		$ 60,000		enter percentages rounded to 1 decimal place

Answer 1