The comparative income statements for Gardenia Corporation are shown below.
|
Gardenia Corporation Comparative Income Statement For the year Ended December 31 |
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|
2007 |
2006 |
|
|
Net sales |
$ 500,000 |
$ 400,000 |
|
Cost of goods sold |
350,000 |
320,000 |
|
Gross profit |
150,000 |
80,000 |
|
Operating expenses |
68,300 |
35,000 |
|
Net income |
81,700 |
45,000 |
Instructions:
a) Prepare a horizontal analysis of the income statement data for Gardenia Corporation using 2006 as a base. Show the amounts of increase or decrease.
b) Prepare a vertical analysis of the income statement data for Gardenia Corporation in columnar form for both years.