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Horizontal Analysis of Income Statement For 2012, 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, 2012 and 20Y1 20Y2 20Y1 Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Income from operations Other revenue Income before income tax Income tax expense Net income Required: $917,320 $760,000 681,600 480,000 $235,720 $280,000 $97,600 $64,000 55,120 40,000 $152,720 $104,000 $83,000 $176,000 3,200 4,054 $87,054 $179,200 24,400 53,800 $62,654 $125,400 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. Use the minus sign to indicate a decrease in the "Increase (Decrease)" columns. McDade Company Comparative Income Statement For the Years Ended December 31, 2012 and 20Y1 20Y2 20Y1 Difference - Amount Difference - Percent Sales $917,320 $760,000 $ % Cost of goods sold Gross profit Selling expenses 681,600 480,000 % $235,720 $280,000 % Administrative expenses Total operating expenses $97,600 $64,000 $ 55,120 40,000 $152,720 $104,000 $ % % Chapter 17 Assignment assignment take frame % Income from operations $83,000 $176,000 $ % Other revenue 4,054 3,200 % Income before income tax $87,054 $179,200 % Income tax expense 24,400 53,800 % Net income $62,654 $125,400 %

Horizontal Analysis of Income Statement For 2012, 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, 2012 and 20Y1 20Y2 20Y1 Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Income from operations Other revenue Income before income tax Income tax expense Net income Required: $917,320 $760,000 681,600 480,000 $235,720 $280,000 $97,600 $64,000 55,120 40,000 $152,720 $104,000 $83,000 $176,000 3,200 4,054 $87,054 $179,200 24,400 53,800 $62,654 $125,400 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. Use the minus sign to indicate a decrease in the "Increase (Decrease)" columns. McDade Company Comparative Income Statement For the Years Ended December 31, 2012 and 20Y1 20Y2 20Y1 Difference - Amount Difference - Percent Sales $917,320 $760,000 $ % Cost of goods sold Gross profit Selling expenses 681,600 480,000 % $235,720 $280,000 % Administrative expenses Total operating expenses $97,600 $64,000 $ 55,120 40,000 $152,720 $104,000 $ % % Chapter 17 Assignment assignment take frame % Income from operations $83,000 $176,000 $ % Other revenue 4,054 3,200 % Income before income tax $87,054 $179,200 % Income tax expense 24,400 53,800 % Net income $62,654 $125,400 %

FINANCIAL ACCOUNTING
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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Horizontal Analysis of Income Statement For 2012, 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, 2012 and 20Y1 20Y2 20Y1 Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Income from operations Other revenue Income before income tax Income tax expense Net income Required: $917,320 $760,000 681,600 480,000 $235,720 $280,000 $97,600 $64,000 55,120 40,000 $152,720 $104,000 $83,000 $176,000 3,200 4,054 $87,054 $179,200 24,400 53,800 $62,654 $125,400 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. Use the minus sign to indicate a decrease in the "Increase (Decrease)" columns. McDade Company Comparative Income Statement For the Years Ended December 31, 2012 and 20Y1 20Y2 20Y1 Difference - Amount Difference - Percent Sales $917,320 $760,000 $ % Cost of goods sold Gross profit Selling expenses 681,600 480,000 % $235,720 $280,000 % Administrative expenses Total operating expenses $97,600 $64,000 $ 55,120 40,000 $152,720 $104,000 $ % % Chapter 17 Assignment assignment take frame % Income from operations $83,000 $176,000 $ % Other revenue 4,054 3,200 % Income before income tax $87,054 $179,200 % Income tax expense 24,400 53,800 % Net income $62,654 $125,400 %
Transcribed Image Text:Horizontal Analysis of Income Statement For 2012, 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, 2012 and 20Y1 20Y2 20Y1 Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Income from operations Other revenue Income before income tax Income tax expense Net income Required: $917,320 $760,000 681,600 480,000 $235,720 $280,000 $97,600 $64,000 55,120 40,000 $152,720 $104,000 $83,000 $176,000 3,200 4,054 $87,054 $179,200 24,400 53,800 $62,654 $125,400 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. Use the minus sign to indicate a decrease in the "Increase (Decrease)" columns. McDade Company Comparative Income Statement For the Years Ended December 31, 2012 and 20Y1 20Y2 20Y1 Difference - Amount Difference - Percent Sales $917,320 $760,000 $ % Cost of goods sold Gross profit Selling expenses 681,600 480,000 % $235,720 $280,000 % Administrative expenses Total operating expenses $97,600 $64,000 $ 55,120 40,000 $152,720 $104,000 $ % % Chapter 17 Assignment assignment take frame % Income from operations $83,000 $176,000 $ % Other revenue 4,054 3,200 % Income before income tax $87,054 $179,200 % Income tax expense 24,400 53,800 % Net income $62,654 $125,400 %
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