For 2014, Lindell Company reported its most significant decline in net income in years. At the end of the year, H. Finn, the president, is presented with the following condensed comparative income statement: Instructions1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 2013 as the base year. Round to one decimal place.2. To the extent the data permit, comment on the significant relationships revealed by the horizontal analysis prepared in(1). Lindell CompanyComparative Income StatementFor the Years Ended December 31, 2014 and 201320142013Sales$1,092,500$950,000Sales returns and allowances.57,500$1,035,00050,000Net sales.....Cost of goods sold.Gross profit.....Selling expensesAdministrative expenses.Total operating expenses$900,000625,000500,000$ 410,000$ 153,600$400,000$120,00097,600$ 251,200$ 158,80015,00080,000$200,000$200,00010,000Income from operationsOther income ..Income before income tax$ 173,800$210,000Income tax expense23,000$ 150,80020,000Net income.$190,000

The income statement of two years is compared to know financial performance.

Answered: For 2014, Lindell Company reported its…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 4RE: Refer to RE22-2. Assume Heller Company had sales revenue of 510,000 in 2019 and 650,000 in 2020....

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For 2014, Lindell Company reported its most significant decline in net income in years. At the end of the year, H. Finn, the president, is presented with the following condensed comparative income statement:

Instructions
1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 2013 as the base year. Round to one decimal place.
2. To the extent the data permit, comment on the significant relationships revealed by the horizontal analysis prepared in(1).

Lindell Company
Comparative Income Statement
For the Years Ended December 31, 2014 and 2013
2014
2013
Sales
$1,092,500
$950,000
Sales returns and allowances.
57,500
$1,035,000
50,000
Net sales.....
Cost of goods sold.
Gross profit.....
Selling expenses
Administrative expenses.
Total operating expenses
$900,000
625,000
500,000
$ 410,000
$ 153,600
$400,000
$120,000
97,600
$ 251,200
$ 158,800
15,000
80,000
$200,000
$200,000
10,000
Income from operations
Other income ..
Income before income tax
$ 173,800
$210,000
Income tax expense
23,000
$ 150,800
20,000
Net income.
$190,000

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