E$13-3($Algo$)$ Preparing and Interpreting a Schedule for Horizontal and Vertical

Analyses $[$LO $13-2,$ LO $13-3,$ LO $13-5]$

According to the producer price index database maintained by the Bureau of Labor Statistics, the average

cost of computer equipment fell $3\mathrm{.}8$ percent between January and December $2018.$

Required:

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 Incorporated for the year

ended December $31,2018.$

$2-$a$.$ Conduct a vertical analysis by expressing each line as a percentage of total revenues.

$2-$b$.$ Excluding income tax, interest, and operating expenses, did Computer Tycoon earn more gross profit

per dollar of sales in $2018$ compared to $2017?$

Complete this question by entering your answers in the tabs below.

Req$1$

Req $2$A

Req $2$A

Req $2$B

Conduct a vertical analysis by expressing each line as a percentage of total revenues. $($Round percentage values to

place.$)$