According to the producer price index database maintained by the Bureau of Labor
Statistics, the average cost of computer equipment fell 8.1 percent between 2012 and
2013.
Required:
1. Conduct a horizontal analysis by calculating the year-over-year changes in each line
item, expressed in dollars and in percentages for the income statement of Computer
Tycoon Inc. for the year ended December 31, 2013. (Decreases should be indicated
by a minus sign. Round percentage values to 1 decimal place.)
COMPUTER TYCOON, INC.
Income Statements
For the Year Ended December 31
Change in
2013
2012
Dollars Percentage
Sales Revenue
$ 119,000 $ 148,500 $ (29,500)
%
Cost of Goods Sold
69,500
79,100
%
Gross Profit
49,500
69,400
%
Selling, General, and Administrative Expenses
37,900
40,800
%
Interest Expense
690
570
%
Income before Income Tax Expense
10,910
28,030
%
Income Tax Expense
2,500
6,900
%
Net Income
$ 8,410 $ 21,130
%