Horizontal and Vertical Analysis
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Following are the income statements for Martha's Miscellaneous for 2008 and 2009
Martha's Miscellaneous Comparative Statements of Income and Retained Earnings
2009 2008 $Change %Change
Sales revenue $700,000 $650,000
Cost of goods sold 500,000 455,000
Gross profit $200,000 $195,000
Payroll expense $50,000 $42,250
Insurance expense 30,000 29,000
Rent expense 18,000 18,000
Depreciation 35,000 15,000
Total expenses $133,000 $104,250
Operating income $67,000 $90,000
Interest expense (7,000) (5,000)
Gain on vehicle sale 25,000 -
Loss on sale of securities (25,000) -
Interest revenue 75,000 50,000
Net income before interest and taxes $135,000 $135,750
Income taxes 40,000 40,250
Net income $95,000 $95,500
Dividends 38,000 38,000
Total retained earnings $57,000 $57,500
Retained earnings 1/1 193,500 136,000
Retained earnings 12/31 $250,500 $193,500
Required
Complete the comparative income statement by computing dollar change ($ change) and percentage change (% change).
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Solution Summary
Response helps in computation of Horizontal and Vertical Analysis
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Following are the income statements for Martha's Miscellaneous for 2008 and 2009
Martha's Miscellaneous Comparative Statements of Income and Retained Earnings
2009 2008 $Change %Change
Sales revenue $700,000 $650,000
Cost of goods sold 500,000 455,000
Gross ...
Purchase this Solution
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