Acc291 Principles of Accounting: P17-5 Income statement data for Web-pics Company

Acc291 Principles of Accounting
P17-5
Income statement data for Web-pics Company for the years ended December 31, 2008 and 2007, are as follows:
2008 2007
Sales 117,000 150,000
Cost of goods sold 56,000 70,000
Gross profit 61,000 80,000
Selling Expenses 36,000 37,500
Administrative expenses 12,500 10,000
Total operating expenses 48,500 47,500
Income before income tax 12,500 32,500
Income tax expense 2,000 10,000
Net Income 10,500 22,500

1. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for 2008 when compared with 2007. Round to one decimal place.
2. What conclusions can be drawn from the horizontal analysis?
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