The Following Is a Summary of Information Presented on the Financial

question 110

Multiple Choice

The following is a summary of information presented on the financial statements of a company on 31 December 2017. $\begin{array}{|l|l|l|}\hline\text { Account } & 2017 & 2016 \\\hline \text { Sales revenue } & \$ 603,000 & \$ 500,000 \\\hline \text { Cost of sales } & 454,000 & 401,000 \\\hline \text { Gross profit } & \$ 149,000 & \$ 99,000 \\\hline \text { Selling expenses } & 55,000 & \$ 4,000 \\\hline \text { Profit before income tax } & \$ 94,000 & \$ 45,000 \\\hline \text { Income tax expense } & 39,000 & 19,000 \\\hline \text { Profit } & \$ 55,000 & \$ 26,000 \\\hline\end{array}$ What would a horizontal analysis report show with respect to Profit?

• A)a 89.66% increase in Profit
• B)a 111.54% increase in Profit
• C)a $26,000 increase in Profit
• D)both Profit before income tax and Profit are 89.66% of Sales revenue

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Definitions:

Anorexia Nervosa

A psychological and life-threatening eating disorder characterized by an extremely low body weight, a severe fear of gaining weight, and a distorted perception of body weight and shape.

Serotonin

A neurotransmitter in the brain that plays key roles in regulating mood, emotion, appetite, and sleep.

Fat Cells

Specialized cells that store energy in the form of fat and regulate metabolism and appetite through hormone release.

Leptin

A hormone produced by fat cells that is involved in regulating appetite and metabolism.