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.