Use the following information to do a horizontal analysis of Magic Corporation's income statement for the current year and prior year: $$\begin{array} { | l | l | l | l | l | }
\hline \text { Account } & \text { Current year } & \text { Priar year } & \text { Dollar Change } & \text { \% Change } \
\hline \text { Cost af good sold } & \$ 375,000 & \$ 300,000 & & \
\hline \text { Selling/general exp } & \$ 60,000 & \$ 40,000 & & \
\hline \text { Gross prafit } & \$ 102,600 & \$ 76,000 & & \
\hline \text { Net incarne } & \$ 17,600 & \$ 22,000 & & \
\hline
\end{array}$$
-What is the percentage change in cost of goods sold?
A)25.00%
B)35.00%
C)-20.00%
D)125.00%

Question

Use the following information to do a horizontal analysis of Magic Corporation's income statement for the current year and prior year: $$\begin{array} { | l | l | l | l | l | } 
\hline \text { Account } & \text { Current year } & \text { Priar year } & \text { Dollar Change } & \text { \% Change } \
\hline \text { Cost af good sold } & \$ 375,000 & \$ 300,000 & & \
\hline \text { Selling/general exp } & \$ 60,000 & \$ 40,000 & & \
\hline \text { Gross prafit } & \$ 102,600 & \$ 76,000 & & \
\hline \text { Net incarne } & \$ 17,600 & \$ 22,000 & & \
\hline
\end{array}$$ 
-What is the percentage change in cost of goods sold?
A)25.00%
B)35.00%
C)-20.00%
D)125.00%

Quizplus · Accepted Answer

The percentage change in cost of goods sold is calculated as follows:Percentage change = (Current year - Prior year) / Prior year x 100= (375,000 - 300,000) / 300,000 x 100= 75,000 / 300,000 x 100= 25%

Use the Following Information to Do a Horizontal Analysis of Magic