The Following Is a Summary of Information Presented on the Financial

question 31

Multiple Choice

The following is a summary of information presented on the financial statements of a company on December 31,2019. $$\begin{array} { | l | r | r | } \hline { \text { Account } } & { \mathbf { 2 0 1 9 } } & { \mathbf { 2 0 1 8 } } \\\hline \text { Net Sales Revenue } & \$ 605,000 & \$ 504,000 \\\hline \text { Cost of Goods Sold } & \underline { 457,000 } & \underline { 402,000 } \\\hline \text { Gross Profit } & \$ 148,000 & \$ 102,000 \\\hline \text { Selling Expenses } & \underline { 50,000 } & \underline { 53,000 } \\\hline \text { Net Income Before Income Tax Expense } & \$ 98,000 & \$ 49,000 \\\hline \text { Income Tax Expense } & \underline { 37,000 } & \underline { 20,000 } \\\hline \text { Net Income } & \$ 61,000 & \$ 29,000 \\\hline\end{array}$$ With respect to net income,a horizontal analysis reveals ________.(Round your answer to two decimal places.)

• A) that net income is 11.03% of net sales revenue
• B) a $29,000 increase in net income
• C) a 110.34% decrease in net income
• D) a 110.34% increase in net income

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Definitions:

Cleft Palate

Failure of the embryonic palate to fuse along the midline, resulting in an opening through the roof of the mouth.

Central Nervous System

The complex network of neurons and supporting cells that includes the brain and spinal cord, vital for controlling body functions.

Ectoderm

The outermost layer of cells in the early embryo, giving rise to the nervous system and skin.

Tonsils

Lymphoid organs located in the throat area that help defend against infection by trapping pathogens entering through the mouth or nose.