For 2012, Macklin Inc. reported a significant decrease in net income. At the end of the year, John Mayer, the president, is presented with the following condensed comparative income statement: Macklin Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Operating income Other revenue Income before income tax expense Income tax expense Net income Required: Sales Cost of goods sold Gross profit Selling expenses 1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y1 as the base year. Use the minus sign to indicate a decrease in the "Increase/(Decrease)" columns. If required, round percentages to one decimal place. Macklin Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 Administrative expenses Total operating expenses Operating income Other revenue Income before income tax expense Income tax expense Net income 2. Net income has $577,179 (403,200) $173,979 $(56,980) (33,320) $(90,300) $83,679 2,691 $86,370 (24,200) $62,170 20Y2 20Y1 $577,179 $513,000 $ (403,200) (320,000) $173,979 $193,000 $ $(56,980) $(43,000) $ (33,320) (27,000) $(90,300) $(70,000) $83,679 $123,000 $ 2,691 2,200 Increase/ Increase/ (Decrease) (Decrease) Amount Percent $86,370 $125,200 (24,200) (37,600) $62,170 $87,600 $ 20Y1 $513,000 (320,000) $193,000 $(43,000) (27,000) $(70,000) $123,000 2,200 $125,200 (37,600) $87,600 from 20Y1 to 20Y2. Sales have ( % % % % % % % % % % % ; however, the cost of goods sold has at a faster rate than sales, causing the gross profit to
For 2012, Macklin Inc. reported a significant decrease in net income. At the end of the year, John Mayer, the president, is presented with the following condensed comparative income statement: Macklin Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Operating income Other revenue Income before income tax expense Income tax expense Net income Required: Sales Cost of goods sold Gross profit Selling expenses 1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y1 as the base year. Use the minus sign to indicate a decrease in the "Increase/(Decrease)" columns. If required, round percentages to one decimal place. Macklin Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 Administrative expenses Total operating expenses Operating income Other revenue Income before income tax expense Income tax expense Net income 2. Net income has $577,179 (403,200) $173,979 $(56,980) (33,320) $(90,300) $83,679 2,691 $86,370 (24,200) $62,170 20Y2 20Y1 $577,179 $513,000 $ (403,200) (320,000) $173,979 $193,000 $ $(56,980) $(43,000) $ (33,320) (27,000) $(90,300) $(70,000) $83,679 $123,000 $ 2,691 2,200 Increase/ Increase/ (Decrease) (Decrease) Amount Percent $86,370 $125,200 (24,200) (37,600) $62,170 $87,600 $ 20Y1 $513,000 (320,000) $193,000 $(43,000) (27,000) $(70,000) $123,000 2,200 $125,200 (37,600) $87,600 from 20Y1 to 20Y2. Sales have ( % % % % % % % % % % % ; however, the cost of goods sold has at a faster rate than sales, causing the gross profit to
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:For 20Y2, Macklin Inc. reported a significant decrease in net income. At the end of the year, John Mayer, the president, is presented with the following condensed comparative income statement:
Macklin Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Y2
$577,179
(403,200)
$173,979
$(56,980)
(33,320)
$(90,300)
$83,679
2,691
$86,370
(24,200)
$62,170
Sales
Cost of goods sold
Gross profit
Selling expenses
Administrative expenses
Total operating expenses
Operating income
Other revenue
Income before income tax expense
Income tax expense
Net income
Required:
Sales
1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y1 as the base year. Use the minus sign to indicate a decrease in the "Increase/(Decrease)" columns. If required, round percentages to one decimal place.
Macklin Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
Cost of goods sold
Gross profit
Selling expenses
Administrative expenses
Total operating expenses
Operating income
Other revenue
Income before income tax expense
Income tax expense
Net income
2. Net income has
20Y2
20Y1
$577,179 $513,000
(403,200) (320,000)
$173,979 $193,000 $
$(56,980) $(43,000) $
(33,320) (27,000)
$(90,300) $(70,000)
$83,679 $123,000 $
2,691
2,200
$125,200 $
Increase/ Increase/
(Decrease) (Decrease)
Amount Percent
$86,370
(24,200) (37,600)
$62,170 $87,600 $
$513,000
(320,000)
$193,000
$(43,000)
(27,000)
$(70,000)
$123,000
2,200
$125,200
(37,600)
$87,600
from 20Y1 to 20Y2. Sales have
%
%
%
%
%
%
%
%
20Y1
%
%
%
; however, the cost of goods sold has
at a faster rate than sales, causing the gross profit to
Expert Solution
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An income statement is a financial report that indicates the revenue and expenses of a business. It also indicates when a business is profitable or losing money for a given time span.
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