Income statement data for Web-pics Company for the years endedDecember 31, 2008
ID: 2445698 • Letter: I
Question
Income statement data for Web-pics Company for the years endedDecember 31, 2008 and 2007 are as follows. 2008 2007 sales 117,000 150,000 cost of goodssold 56,000 70,000 Grossprofit 61,000 80,000 Sellingexpenses 36,000 37,500 Administrativeexpenses 12,500 10,000 Total operatingexpenses 48,500 47,500 Income before incometaxes 12,500 32,500 Income taxexpense 2,000 10,000 Netincome 10,500 22,500 a. Prepare a comparative Income Statement withhorizontal analysis indicating the increase (decrease) for2008 when compared with 2007. Round to one decimalplace. b. What conclusion can be drawn from the horizontalanalysis. Income statement data for Web-pics Company for the years endedDecember 31, 2008 and 2007 are as follows. 2008 2007 sales 117,000 150,000 cost of goodssold 56,000 70,000 Grossprofit 61,000 80,000 Sellingexpenses 36,000 37,500 Administrativeexpenses 12,500 10,000 Total operatingexpenses 48,500 47,500 Income before incometaxes 12,500 32,500 Income taxexpense 2,000 10,000 Netincome 10,500 22,500 a. Prepare a comparative Income Statement withhorizontal analysis indicating the increase (decrease) for2008 when compared with 2007. Round to one decimalplace. b. What conclusion can be drawn from the horizontalanalysis.Explanation / Answer
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