Two income statements for Fuller Company are shown on the following page.

Two income statements for Fuller Company are shown on the following page.


Fuller Company
Income Statements
For Years Ended December 31
2014 2013
Fees earned $680,000 $850,000
Operating expenses 541,875 637,500
Net income $138,125 $212,500




Prepare a horizontal analysis of Fuller Company’s income statements.


Answer:

Fuller Company
Income Statements
For Years Ended December 31
2014 2013
Increase/(Decrease)
Amount Percent
Fees earned $680,000 $850,000 $(170,000) –20.0%
Operating expenses 541,875 637,500 (95,625) –15.0%
Net income $138,125 $212,500 $ (74,375) –35.0%