Response to the following problem:
The following information is taken from the records of Erie Corp. for the year ended December 31:
|
|
2017
|
2016
|
|
Sales
|
$1,397
|
$1,122
|
|
Cost of goods sold
|
935
|
814
|
|
Selling expenses
|
154
|
121
|
|
General expenses
|
88
|
77
|
|
Other revenue
|
4
|
7
|
|
Interest expense
|
2
|
9
|
|
Income taxes
|
134
|
66
|
Required:
1. Prepare a vertical analysis of the income statement, showing the above items as well as gross profit, income from operations (excludes other revenue), income before interest and income taxes, income before income taxes, and net income.
2. Describe the favourable and unfavourable changes.