Below is the comparative income statement of P. Donnelly, Inc.

Requirements

1. Prepare a horizontal analysis of the comparative income statement of P. Donnelly, Inc. Round percentage changes to the nearest tenth of a percent.

2. Why did net income increase by a higher percentage than total revenues increased during 2018?

Transcribed Image Text:

P. Donnelly, Inc. Comparative Income Statement Years Ended December 31, 2018 and 2017 2018 2017 $500,000 $439,500 Revenue Expenses: $245,000 $236,000 103,500 Cost of Goods Sold Selling and General Expenses Interest Expense Income Tax Expense Total Expenses 111,000 10,000 6,500 54,700 420,700 $ 79,300 44,400 390,400 $ 49,100 Net Income