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 20Y1 Sales $652,230 $560,000 Cost of goods sold (469,000) (350,000) Gross profit $183,230 $210,000 Selling expenses $(66,980) $(47,000) Administrative expenses (39,180) (30,000) Total operating expenses $(106,160) $(77,000) Operating income $77,070 $133,000 Other revenue 3,046 2,400 Income before income tax expense $80,116 $135,400 Income tax expense (22,400) (40,600) Net income $57,716 $94,800 Required: 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.
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 20Y1 Sales $652,230 $560,000 Cost of goods sold (469,000) (350,000) Gross profit $183,230 $210,000 Selling expenses $(66,980) $(47,000) Administrative expenses (39,180) (30,000) Total operating expenses $(106,160) $(77,000) Operating income $77,070 $133,000 Other revenue 3,046 2,400 Income before income tax expense $80,116 $135,400 Income tax expense (22,400) (40,600) Net income $57,716 $94,800 Required: 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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 | 20Y1 | ||
| Sales | $652,230 | $560,000 | |
| Cost of goods sold | (469,000) | (350,000) | |
| Gross profit | $183,230 | $210,000 | |
| Selling expenses | $(66,980) | $(47,000) | |
| Administrative expenses | (39,180) | (30,000) | |
| Total operating expenses | $(106,160) | $(77,000) | |
| Operating income | $77,070 | $133,000 | |
| Other revenue | 3,046 | 2,400 | |
| Income before income tax expense | $80,116 | $135,400 | |
| Income tax expense | (22,400) | (40,600) | |
| Net income | $57,716 | $94,800 |
Required:
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.
Transcribed Image Text:2. Net income has
from 20Y1 to 20Y2. Sales have
however, the cost of goods sold has
at a faster rate than sales, causing the
gross profit to
Transcribed Image Text:Macklin Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
Increase/ Increase/
(Decrease) (Decrease)
20Υ2
20Y1
Amount
Percent
Sales
$652,230
$560,000 $
%
Cost of goods sold
(469,000) (350,000)
%
Gross profit
$183,230
$210,000
%
Selling expenses
$(66,980) $(47,000) $
%
Administrative expenses
(39,180)
(30,000)
%
Total operating expenses
$(106,160) $(77,000)
$4
%
Operating income
$77,070
$133,000 $
%
Other revenue
3,046
2,400
%
Income before income tax expense
$80,116
$135,400 $
%
Income tax expense
(22,400)
(40,600)
%
Net income
$57,716
$94,800 $
%
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