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QUESTION 3
Income statement data for Atif Creative Sdn Bhd for the years ended 31 December 2019 and 2018, are as follows:
| | 2019 (RM) | 2018 (RM) |
| Sales | 117,000 | 150,000 |
| Cost of goods sold | 56,000 | 70,000 |
| Gross profit | 61,000 | 80,000 |
| Selling expenses | 36,000 | 37,500 |
| Administrative expenses | 12,500 | 10,000 |
| Total operating expenses | 48,500 | 47,500 |
| Income before tax | 12,500 | 32,500 |
| Taxation | 2,000 | 10,000 |
| Net income after tax | 10,500 | 22,500 |
REQUIRED:
(a) Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for 2019 when compared with 2018.
(b) What conclusion can be drawn from the above horizontal analysis?
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