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Prob. 17-1A 1. MCDADE COMPANY Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 Increase (Decrease) 20Υ2 20Υ1 Amount Percent 1500000 1250000 Sales Cost of goods sold Gross profit 510000 475000 990000 775000 Selling expenses Administrative expenses 200000 156250 270000 180000 Total operating expenses Income from operations 450000 356250 540000 418750 Other revenue 60000 50000 Income before income tax 600000 468750 Income tax expense 450000 375000 Net income 150000 93750

Prob. 17-1A 1. MCDADE COMPANY Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 Increase (Decrease) 20Υ2 20Υ1 Amount Percent 1500000 1250000 Sales Cost of goods sold Gross profit 510000 475000 990000 775000 Selling expenses Administrative expenses 200000 156250 270000 180000 Total operating expenses Income from operations 450000 356250 540000 418750 Other revenue 60000 50000 Income before income tax 600000 468750 Income tax expense 450000 375000 Net income 150000 93750

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Prob. 17-1A 1. MCDADE COMPANY Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 Increase (Decrease) 20Υ2 20Υ1 Amount Percent Sales 1500000 1250000 Cost of goods sold 510000 475000 Gross profit 990000 775000 Selling expenses Administrative expenses 270000 200000 180000 156250 Total operating expenses 450000 356250 Income from operations 540000 418750 Other revenue 60000 50000 Income before income tax 600000 468750 Income tax expense 450000 375000 Net income 150000 93750 D,
Transcribed Image Text:Prob. 17-1A 1. MCDADE COMPANY Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 Increase (Decrease) 20Υ2 20Υ1 Amount Percent Sales 1500000 1250000 Cost of goods sold 510000 475000 Gross profit 990000 775000 Selling expenses Administrative expenses 270000 200000 180000 156250 Total operating expenses 450000 356250 Income from operations 540000 418750 Other revenue 60000 50000 Income before income tax 600000 468750 Income tax expense 450000 375000 Net income 150000 93750 D,
PR 17-1A Horizontal analysis of income statement OBJ. 2 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 20Υ2 20Υ1 Sales.. $16,800,000 $15,000,000 Cost of merchandise sold... 11,500,000 $ 5,300,000 $ 1,770,000 10,000,000 $ 5,000,000 $ 1,500,000 Gross profit. Selling expenses.. Administrative expenses Total operating expenses... 1,220,000 1,000,000 $ 2,990,000 $ 2,500,000 $ 2,500,000 225,000 $ 2,725,000 1,500,000 $ 1,153,950 S 1,225,000 Income from operations.. $ 2,310,000 256,950 Other revenue... Income before income tax expense. $ 2,566,950 Income tax expense.... 1,413,000 Net income.... Instructions 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. 2. To the extent the data permit, comment on the significant relationships revealed by the horizontal analysis prepared in (1).
Transcribed Image Text:PR 17-1A Horizontal analysis of income statement OBJ. 2 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 20Υ2 20Υ1 Sales.. $16,800,000 $15,000,000 Cost of merchandise sold... 11,500,000 $ 5,300,000 $ 1,770,000 10,000,000 $ 5,000,000 $ 1,500,000 Gross profit. Selling expenses.. Administrative expenses Total operating expenses... 1,220,000 1,000,000 $ 2,990,000 $ 2,500,000 $ 2,500,000 225,000 $ 2,725,000 1,500,000 $ 1,153,950 S 1,225,000 Income from operations.. $ 2,310,000 256,950 Other revenue... Income before income tax expense. $ 2,566,950 Income tax expense.... 1,413,000 Net income.... Instructions 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. 2. To the extent the data permit, comment on the significant relationships revealed by the horizontal analysis prepared in (1).
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