Question 1 Prepare a horizontal analysis of the following co

Question 1

Prepare a horizontal analysis of the following comparative income statement for Westwind Corporation. Round percentage changes to the nearest one-tenth percent.

Westwind Corporation

Comparative Income Statement

For the Years Ended December 31, 2016 and 2015

2016

2015

Total revenue

$1,400,000

$1,250,000

Expenses:

   Cost of goods sold

925,000

$830,000

   Operating expenses

313,000

280,000

   Interest expense

14,000

12,000

   Income tax expense

48,300

38,000

Total expenses

$1,300,300

$1,160,000

Net Income

$99,700

$90,000

Westwind Corporation
Comparative Income Statement
For the Years Ended December 31, 2016 and 2015
	2016	2015
Total revenue	$1,400,000	$1,250,000
Expenses:
Cost of goods sold	925,000	$830,000
Operating expenses	313,000	280,000
Interest expense	14,000	12,000
Income tax expense	48,300	38,000
Total expenses	$1,300,300	$1,160,000
Net Income	$99,700	$90,000

Solution

Compartive income statement Increase(decrease) for the years ended december 31,2016 and 2015 Amount percentage 2016 2015 total revenue 1,400,000 1,250,000 150,000 12.0% Expenses: cost of goods sold 925,000 830,000 95,000 11.4% operating expenses 313,000 280,000 33,000 11.8% interest expense 14,000 12,000 2,000 16.7% income tax expense 48,300 38,000 10,300 27.1% total expenses 1,300,300 1,160,000 140,300 12.1% Net income 99,700 90,000 9,700 10.8%