Question

Exercise 13-6

Here are the comparative income statements of Flint Corporation.

FLINT CORPORATION Comparative Income Statement For the Years Ended December 31
		2017		2016
Net sales		$610,300		$540,600
Cost of goods sold		448,800		426,200
Gross Profit		161,500		114,400
Operating expenses		76,400		48,100
Net income		$ 85,100		$ 66,300

1. Prepare a horizontal analysis of the income statement data for Flint Corporation, 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%.)

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

Answer 1

FLINT CORPORATION Comparative Income Statement For the Years Ended December 31
					Increase or (Decrease) During 2014
	2017		2016		Amount		Percentage
Net sales	$610,300		$540,600		$69,700			12.9%
Cost of goods sold	$448,800		$426,600		$22,200			5.2%
Gross Profit	$161,500		$114,400		$47,100			41.2%
Operating expenses	$76,400		$48,100		$28,300			58.8%
Net income	$85,100		$ 66,300		$18,800			26.4%

FLINT CORPORATION Comparative Income Statements For the Years Ended December 31
	2017					2016
	$		Percent			$		Percent
Net sales	$610,300			100%		$540,600			100%
Cost of goods sold	$448,800			73.5%		$426,200			78.8%
Gross Profit	$161,500			26.5%		$114,400			21.2%
Operating expenses	$76,400			12.5%		$48,100			8.9%
Net income	$85,100			13.9%		$66,300			12.3%