Horizontal Analysis of Income Statement
For 2014, Wiglaf Company reported its most significant decline in net income in years. At the end of the year, C.S. Lewis, the president, is presented with the following condensed comparative income statement:
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Wiglaf Company
Comparative Income Statement
For the Years Ended December 31, 2014 and 2013
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2014
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2013
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Sales
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$704,000
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$640,000
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Sales returns and allowances
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39,104
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32,000
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Net sales
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$664,896
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$608,000
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Cost of goods sold
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456,000
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380,000
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Gross profit
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$208,896
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$228,000
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Selling expenses
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$63,750
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$51,000
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Administrative expenses
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37,760
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32,000
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Total operating expenses
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$101,510
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$83,000
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Income from operations
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$107,386
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$145,000
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Other income
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3,177
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2,600
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Income before income tax
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$110,563
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$147,600
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Income tax expense
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31,000
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44,300
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Net income
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$79,563
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$103,300
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Prepare a comparative income statement with horizontal analysis for the two-year period, using 2013 as the base year. Use the minus sign to indicate a decrease in the "Difference" columns. If required, round to one decimal place.