Question

*Exercise 9-6 

Here are the comparative income statements of Delaney Corporation, 

DELANEY CORPORATION Comparative Income Statements For the Years Ended December 31 

	2017	2016
Net sales	$598,000	$500,000
Cost of goods sold	477,000	420,000
Gross Profit	121,000	80,000
Operating expenses	80,000	44,000
Net income	$ 41,000	$36,000

Prepare a horizontal analysis of the income statement data for Delaney 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%.) 

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

Answer 1

DELANEY CORPORATION
Condensed Income Statement
Horizontal analysis
			Increase (Decrease) in current (versus Period)
	2017	2016	Amount	Percentage*
Net sales	$        598,000	$        500,000	$            98,000	19.6%
Cost of goods sold	$        477,000	$        420,000	$            57,000	13.6%
Gross profit	$        121,000	$           80,000	$            41,000	51.3%
Operating expense	$           80,000	$           44,000	$            36,000	81.8%
Net Income	$           41,000	$           36,000	$              5,000	13.9%

*Change in amount/ Base year amount..................Base year is 2016

.

DELANEY CORPORATION
Condenced Income Statement
Vertical analysis
	2,017		2,016
	Amount	Percent	Amount	Percent
Net sales	$        598,000	100.0%	$         500,000	100.0%
Cost of goods sold	$        477,000	79.8%	$         420,000	84.0%
Gross profit	$        121,000	20.2%	$            80,000	16.0%
Operating expense	$           80,000	13.4%	$            44,000	8.8%
Net Income	$           41,000	6.9%	$            36,000	7.2%

All percentage as a percentage of sales for respective year