Data for Simba Corporation for the year ended December 31, is presented below.

Simba Corporation

Condensed Income Statement

For the year ended December 31

2006

2005

Amount

Amount

Sales

$ 750,000

$ 600,000

Cost of goods sold

450,000

390,000

Gross profit

300,000

210,000

Selling expenses

125,000

75,000

Administration expenses

76,000

54,000

Total operating expenses

201,000

129,000

Income before income taxes

99,000

81,000

Income tax expenses

30,000

20,000

Net income

69,000

61,000

Instructions:

(a) Prepare a schedule showing a horizontal analysis for 2006 using 2005 as the base year.

(b) Prepare a schedule showing a vertical analysis for both years.