Question

Brief Exercise 13-6

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Net income was $501,000 in 2015, $471,000 in 2016, and $519,000 in 2017. What is the percentage of change from (a) 2015 to 2016, and (b) from 2016 to 2017? Is the change an increase or a decrease? (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000), (20%). Round percentages to 0 decimal places, e.g. 12%.)

				Amount			Percentage
(a)		2015–2016		$ -30000			?	%		DecreaseIncrease
(b)		2016–2017		$ 48000			?	%		DecreaseIncrease

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Answer 1

For Trend Analysis
Amount of change = Current year amount - Base year amount
% change = (Current year amount - Base year amount) / Base year amount x 100
a	From 2015 to 2016
	Amount of change = Current year amount - Base year amount
		=	$471000-$501000
		=	$ (30,000.00)
	% change = (Current year amount - Base year amount) / Base year amount x 100
		=	(471000-501000)/501000*100
		=	-6% ---->Decrease
b	From 2016 to 2017
	Amount of change = Current year amount - Base year amount
		=	$519000-$471000
		=	$   48,000.00
	% change = (Current year amount - Base year amount) / Base year amount x 100
		=	($519000-$471000)/$471000*100
		=	10% --->Increase