Horizontal analysis of income statement For 20Y2, Macklin Inc. reported a significant increase in net income. At the end of the year, John Mayer, the president, is presented with the following condensed comparitive income statement: McDade Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $910, 000 $700,000 Cost of goods sold 441,000 350,000 Gross Profit $469,000 350,000 Selling expenses $139,150 $115,000 Administrative expenses 99,450 85,000 Total operating expenses $238,600 $200,000 Income from operations $230,400 $150,000 Other income 65,000 50,000 Income before income tax $295,400 $200,000 Income tax expense 65,000 50,000 Net income $230,400 $150,000 Instructions 1. Prepare a comparitive income statement with horizontal analysis for the two-year period , using 20Y1 as the base year. (Round percentages to one decimal place.) 2. To the extent the data permit, comment on the significant relationships revealed by the horizontal analysis prepared in (1).
Horizontal analysis of income statement For 20Y2, Macklin Inc. reported a significant increase in net income. At the end of the year, John Mayer, the president, is presented with the following condensed comparitive income statement: McDade Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $910, 000 $700,000 Cost of goods sold 441,000 350,000 Gross Profit $469,000 350,000 Selling expenses $139,150 $115,000 Administrative expenses 99,450 85,000 Total operating expenses $238,600 $200,000 Income from operations $230,400 $150,000 Other income 65,000 50,000 Income before income tax $295,400 $200,000 Income tax expense 65,000 50,000 Net income $230,400 $150,000 Instructions 1. Prepare a comparitive income statement with horizontal analysis for the two-year period , using 20Y1 as the base year. (Round percentages to one decimal place.) 2. To the extent the data permit, comment on the significant relationships revealed by the horizontal analysis prepared in (1).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Horizontal analysis of income statement
For 20Y2, Macklin Inc. reported a significant increase in net income. At the end of the year, John Mayer, the president, is presented with the following condensed comparitive income statement:
|
McDade Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 |
| 20Y2 | 20Y1 | |
| Sales | $910, 000 | $700,000 |
| Cost of goods sold | 441,000 | 350,000 |
| Gross Profit | $469,000 | 350,000 |
| Selling expenses | $139,150 | $115,000 |
| Administrative expenses | 99,450 | 85,000 |
| Total operating expenses | $238,600 | $200,000 |
| Income from operations | $230,400 | $150,000 |
| Other income | 65,000 | 50,000 |
| Income before income tax | $295,400 | $200,000 |
| Income tax expense | 65,000 | 50,000 |
| Net income | $230,400 | $150,000 |
Instructions
1. Prepare a comparitive income statement with horizontal analysis for the two-year period , using 20Y1 as the base year.
(Round percentages to one decimal place.)
2. To the extent the data permit, comment on the significant relationships revealed by the horizontal analysis prepared in (1).
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