The following is a summary of information presented on the f

The following is a summary of information presented on the financial statements of a company on December 31, 2019 2019 2018 Account Net Sales Revenue Cost of Goods Sold Gross Profit Selling Expenses Net Income Before Income Tax Expense Income Tax Expense Net Income $605,000 $504,000 457.000 402.000 $148,000 $102,000 50000 53.000 $98,000 $49,000 37.000 20.000 $61,000 $29,000 With respect to net income, a horizontal analysis reveals( (Round your answer to two decimal places) O A. a 110.34% increase in net income O B. a $29,000 increase in net income ° C. that net income is 11 03% of net sales revenue D. a 110.34% decrease in net income

Solution

The horizontal analysis shows change in selective values over a period of time etc.

Hence horizontal analysis for 2018-2019 shows increase in net income of:

($61000-$29000)/$29000

ie

1.1034 times net income of 2018

=110.34% increase in net income(Approx)

Hence the correct option is A.