Project #44193 - Horizontal Analysis of Income Statement

- Just a Horizontal Analysis of the Income Statement

- In Microsoft Excel w/ formulas/formatting

- 1 Question Only (Prepare a horizontal analysis of the income statement for Cookie & Coffee Creations Inc. using 2017 as a base year.)

 

Continuing Cookie Chronicle

(Note: This is a continuation of the Cookie Chronicle from Chapters 1 through 12.)

Natalie and Curtis have comparative balance sheets and income statements for Cookie & Coffee Creations Inc. They have been told that they can use these financial statements to prepare horizontal and vertical analyses, to calculate financial ratios., to analyze how their business is doing, and to make some decisions they have been considering.

 

CCC13 The comparative balance sheet of Cookie & Coffee Creations Inc. at October 31, 2018 for the years 2018 and 2017, and the income statements for the years ended October 31, 2017 and 2018, are presented below.

 

COOKIE & COFFEE CREATIONS INC.

 

Income Statement

 

Year Ended October 31

 

 

2018

 

2017

Sales

$485,625

 

$462,500

Cost of goods sold

   222,694

 

   208,125

Gross profit

   262,931

 

  254,375

Operating expenses

   Salaries and wages expense

 

147,979

 

 

146,350

   Depreciation expense

17,600

 

9,100

   Other operating expenses

48,186

 

42,925

     Total operating expenses

  213,765

 

  198,375

Income from operations

    49,166

 

    56,000

Other expenses

   Interest expense

 

413

 

 

0

   Loss on disposal of plant assets

2,500

 

0

     Total other expenses

2,913

 

0

Income before income tax

46,253

 

56,000

Income tax expense

     9,251

 

    14,000

Net income

$  37,002

 

$  42,000

 

Additional information:

 

Natalie and Curtis are thinking about borrowing an additional $20,000 to buy more kitchen equipment. The loan would be repaid over a 4-year period. The terms of the loan provide for equal semi-annual payments of $2,500 on May 1 and November 1 of each year, plus interest of 5% on the outstanding balance.

 

Instructions (One Question Only)

 

 (b)Prepare a horizontal analysis of the income statement for Cookie & Coffee Creations Inc. using 2017 as a base year.

 

 

Subject Business
Due By (Pacific Time) 10/21/2014 12:00 am
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