Question

Exercise 18-4 The comparative condensed income statements of Emley Corporation are shown below. EMLEY CORPORATION Comparative Condensed Income Statements For the Years Ended December 31 2017 2016 Net sales $745,800 $678,000 Cost of goods sold 545,790 475,600 Gross profit 200,010 202,400 Operating expenses 141,250 135,600 Net income $ 58,760 $ 66,800 (a) Prepare a horizontal analysis of the income statement data for Emley Corporation using 2016 as a base. (Enter negative amounts and percentages using either a negative sign preceding the number e.g. -45, -45% or parentheses e.g. (45), (45%). Round percentages to 1 decimal place, e.g. 12.3%.) EMLEY CORPORATION Condensed Income Statements Increase or (Decrease) During 2017 2017 2016 Amount Percentage Net sales $745,800 $678,000 $ % Cost of goods sold 545,790 475,600 % Gross profit 200,010 202,400 % Operating expenses 141,250 135,600 % Net income $58,760 $66,800 $ % (b) Prepare a vertical analysis of the income statement data for Emley Corporation in columnar form for both years. (Round percentages to 1 decimal place, e.g. 12.3%.) EMLEY CORPORATION Condensed Income Statements 2017 2016 Amount Percent Amount Percent Net sales $745,800 % $678,000 % Cost of goods sold 545,790 % 475,600 % Gross profit 200,010 % 202,400 % Operating expenses 141,250 % 135,600 % Net income $ 58,760 % $ 66,800 %

Answer 1

a
EMLEY CORPORATION
Condensed Income Statements
For the Years Ended December 31
			Increase or (Decrease) During 2017
	2017	2016	Amount	Percentage
Net sales	745800	678000	67800	10.0%
Cost of goods sold	545790	475600	70190	14.8%
Gross profit	200010	202400	-2390	-1.2%
Operating expenses	141250	135600	5650	4.2%
Net income	58760	66800	-8040	-12.0%
b
EMLEY CORPORATION
Condensed Income Statements
For the Years Ended December 31
	2017		2016
	Amount	Percent	Amount	Percent
Net sales	745800	100.0%	678000	100.0%
Cost of goods sold	545790	73.2%	475600	70.1%
Gross profit	200010	26.8%	202400	29.9%
Operating expenses	141250	18.9%	135600	20.0%
Net income	58760	7.9%	66800	9.9%