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.

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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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.

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: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
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 $
%
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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