The income statements for Urban Outfits, Inc. are presented below: Urban Outfits, Inc. Income Statements Year Ended December 31 Current Year Prior Year Sales Revenue $ 806,559 $ 747,270 Cost of Goods Sold 403,589 373,505 Gross Profit 402,970 373,765 Operating and Other Expenses 141,050 129,500 Interest Expense 7,750 18,000 Income Tax Expense 48,200 46,700 Net Income $ 205,970 $ 179,565 Required: Prepare a horizontal analysis of the income statement above.

Answer and Explanation:

As per the data given in the question,

                Prior year          Current year        Increase in $       increase in %

Sales          $747,270          $806,559              $59,289                  7.93%

COGS         $373,505         $403.589              $30,084                  8.05%

Gross Profit $373,765        $402,970              $29,205                  7.81%

Operating and  

other expenses$129,500   $141,050               $11,550                    8.92%  

Interest expense $18,000   $7,750                -$10,250                  -56.94%

Income tax         $46,700    $48,200              $1,500                      3.21%

Net income        $179,565   $205,970            $26,405                  14.70%

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answer; test-retest;