Wednesday, November 9, 2011

Managerial Accounting: E14-13 Horizontal analysis-income statement - Data for Verifine Designs Inc

E14-13 Horizontal analysis-income statement

Data for Verifine Designs, Inc. follow:

Verifine Designs INC

Comparative Income Statement

Years ended December 31, 2011 and 2010

2011 2010

Net sales revenue 428,950 371,000

Expenses: Cost of goods sold 203,850 189,350

Selling and general expenses 99,350 93,000

Other expense 6,750 5,000

Total expenses 309,950 287,350

Cash and cash equivalents 119,000 83,650

Requirements:

1.Prepare a horizontal analysis of the comparative income statement of Verifine Designs Ince. Round percentage changes to the nearest one-tenth percent (three decimal places)

2.Why did 2011 net income increase by a higher percentage than net sales revenue?

Tutorial: E14-13 Verifine Designs

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