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 dollar change in selling/general expenses?
A)$100,000
B)$75,000
C)$(4,400)
D)$20,000

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 dollar change in selling/general expenses?
A)$100,000
B)$75,000
C)$(4,400)
D)$20,000

Quizplus · Accepted Answer

The dollar change in selling/general expenses is calculated by subtracting the prior year's amount from the current year's amount: $60,000 - $40,000 = $20,000.

Use the Following Information to Do a Horizontal Analysis of Magic