For 20Y2, McDade Company reported a decline in net income. At the end of the year, T. Burrows, the president, is presented with the following condensed comparative income statement: McDade Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $ 16,800,000 $ 15,000,000 Cost of goods sold (11,500,000) (10,000,000) Gross profit $ 5,300,000 $ 5,000,000 Selling expenses $ (1,770,000) $ (1,500,000) Administrative expenses (1,220,000) (1,000,000) Total operating expenses $ (2,990,000) $ (2,500,000) Operating income $ 2,310,000 $ 2,500,000 Other revenue 256,950 225,000 Income before income tax expense $ 2,566,950 $ 2,725,000 Income tax expense (1,413,000) (1,500,000) Net income $ 1,153,950 $ 1,225,000 1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y1 as the base year. Round percentages to one decimal place. For those boxes in which you must enter subtracted or negative numbers use a minus sign. (Picture attached for the chart)
For 20Y2, McDade Company reported a decline in net income. At the end of the year, T. Burrows, the president, is presented with the following condensed comparative income statement: McDade Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $ 16,800,000 $ 15,000,000 Cost of goods sold (11,500,000) (10,000,000) Gross profit $ 5,300,000 $ 5,000,000 Selling expenses $ (1,770,000) $ (1,500,000) Administrative expenses (1,220,000) (1,000,000) Total operating expenses $ (2,990,000) $ (2,500,000) Operating income $ 2,310,000 $ 2,500,000 Other revenue 256,950 225,000 Income before income tax expense $ 2,566,950 $ 2,725,000 Income tax expense (1,413,000) (1,500,000) Net income $ 1,153,950 $ 1,225,000 1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y1 as the base year. Round percentages to one decimal place. For those boxes in which you must enter subtracted or negative numbers use a minus sign. (Picture attached for the chart)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Horizontal analysis of income statement
(What did I do wrong? Anyone know the correct answers to the ones I got wrong?)
For 20Y2, McDade Company reported a decline in net income. At the end of the year, T. Burrows, the president, is presented with the following condensed comparative income statement:
| McDade Company | ||
| Comparative Income Statement | ||
| For the Years Ended December 31, 20Y2 and 20Y1 | ||
| 20Y2 | 20Y1 | |
| Sales | $ 16,800,000 | $ 15,000,000 |
| Cost of goods sold | (11,500,000) | (10,000,000) |
| Gross profit | $ 5,300,000 | $ 5,000,000 |
| Selling expenses | $ (1,770,000) | $ (1,500,000) |
| Administrative expenses | (1,220,000) | (1,000,000) |
| Total operating expenses | $ (2,990,000) | $ (2,500,000) |
| Operating income | $ 2,310,000 | $ 2,500,000 |
| Other revenue | 256,950 | 225,000 |
| Income before income tax expense | $ 2,566,950 | $ 2,725,000 |
| Income tax expense | (1,413,000) | (1,500,000) |
| Net income | $ 1,153,950 | $ 1,225,000 |
1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y1 as the base year. Round percentages to one decimal place. For those boxes in which you must enter subtracted or negative numbers use a minus sign. (Picture attached for the chart)
Transcribed Image Text:2. BE 14.06 ALGO
McDade Company
Comparative Income Statement
3. BE 14.07 ALGO
For the Years Ended December 31, 20Y2 and 20Y1
Increase/(Decrease)
4. EX 14 05
20Y2
20Y1
Amount
Percent
16.800.000 v
11.500.000 x
5. EX 14.06 ALGO
15.000.000
10.000.000 x
Sales
1000.000.00
12.00
Cost of goods sold
1.500.000.00 v
15.0 v
6. EX 14.07 ALGO
Gross profit
5.000.000 v 300.000.00
6.0 v
5.300.000
7. PR.14.01A
1.770.000 x s 1.500.000 xS 270.000.00 v
18.0
22.0 v%
Selling expenses
8. PR14.0SA
Administrative expenses
1.220,000 X
220.000.00V
1.000,000 X
Total operating expenses
2.990.000 x
2.500.000 X
490.000.00
19.6 v
Operating income
2310.000
2.500,000 v s 190.000.00 v
1.6 v
254.950
225.000 V
31950.00
Other revenue
142
Income before income tax expense
2.566.950
2.725.000 v
158.050.00
Income tax expense
1413.000 x
1.500.000 x
47.000.00 v
Net income
1.153.950
1.225.000
-71.050.00
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