Horizontal Analysis of Income StatementFor 20Y2, McDade Company reported a decline in net income. At the end of the year, T. Burrows, the president, is presented with the followingcondensed comparative income statement:McDade CompanyComparative Income StatementFor the Years Ended December 31, 20Y2 and 20Y120Υ220Υ1Sales$829,639$693,000Cost of merchandise sold616,000440,000Gross profit$213,639$253,000Selling expenses$87,000$58,000Administrative expenses50,32037,000Total operating expenses$137,320$95,000Income from operations$76,319$158,000Other revenue3,6342,900Income before income tax expense$79,953$160,900Income tax expense22,40048,300Net income$57,553$112,600Required: 1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y1 as the base year. Round percentages toone decimal place. Use the minus sign to indicate a decrease in the "Difference" columns.McDade CompanyComparative Income StatementFor the Years Ended December 31, 20Y2 and 20Y1DifferenceDifference- Amount- Percent20Y220Y1Sales$829,639 $693,000136,639%Cost of merchandise sold616,000 440,000176,000 V%Gross profit$213,639 $253,000-39,361 V%Selling expenses$87,000 $58,00029,000%Administrative expenses50,32037,00013,320 V%Total operating expenses$137,320 $95,000 $42,320%Income from operations$76,319 $158,000 $-81,681%Other revenue3,6342,900734 V%Income before income tax expense$79,953 $160,900-80,947%Income tax expense22,40048,300-25,900%Net income$57,553 $112,600 $-55,047%>

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Description: Horizontal Analysis of Income StatementFor 20Y2, McDade Company reported a decline in net income. At the end of the year, T. Burrows, the president, is presented with the followingcondensed comparative income statement:McDade CompanyComparative Inco

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Horizontal Analysis Income Statemen 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 20Υ1 Sales $829,639 $693,000 Cost of merchandise sold 616,000 440,000 Gross profit $213,639 $253,000 Selling expenses $87,000 $58,000 Administrative expenses 50,320 37,000 Total operating expenses $137,320 $95,000 Income from operations $76,319 $158,000 Other revenue 3,634 2,900 Income before income tax expense $79,953 $160,900 Income tax expense 22,400 48,300 Net income $57,553 $112,600

Horizontal Analysis Income Statemen 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 20Υ1 Sales $829,639 $693,000 Cost of merchandise sold 616,000 440,000 Gross profit $213,639 $253,000 Selling expenses $87,000 $58,000 Administrative expenses 50,320 37,000 Total operating expenses $137,320 $95,000 Income from operations $76,319 $158,000 Other revenue 3,634 2,900 Income before income tax expense $79,953 $160,900 Income tax expense 22,400 48,300 Net income $57,553 $112,600

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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