Horizontal Analysis of Income Statement 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 $768,565 $665,000 Cost of goods sold 554,400 420,000 Gross profit $214,165 $245,000 Selling expenses $78,400 $56,000 Administrative expenses 45,080 35,000 Total operating expenses $123,480 $91,000 Income from operations $90,685 $154,000 Other revenue 3,475 2,800 Income before income tax $94,160 $156,800 Income tax expense 26,400 47,000 Net income $67,760 $109,800 Required: 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, 20Y2 and 20Y1 20Y2 20Y1 Difference - Amount Difference - Percent Sales $768,565 $665,000 $fill in the blank e7440e062faa03f_1 fill in the blank e7440e062faa03f_2% Cost of goods sold 554,400 420,000 fill in the blank e7440e062faa03f_3 fill in the blank e7440e062faa03f_4% Gross profit $214,165 $245,000 $fill in the blank e7440e062faa03f_5 fill in the blank e7440e062faa03f_6% Selling expenses $78,400 $56,000 $fill in the blank e7440e062faa03f_7 fill in the blank e7440e062faa03f_8% Administrative expenses 45,080 35,000 fill in the blank e7440e062faa03f_9 fill in the blank e7440e062faa03f_10% Total operating expenses $123,480 $91,000 $fill in the blank e7440e062faa03f_11 fill in the blank e7440e062faa03f_12% Income from operations $90,685 $154,000 $fill in the blank e7440e062faa03f_13 fill in the blank e7440e062faa03f_14% Other revenue 3,475 2,800 fill in the blank e7440e062faa03f_15 fill in the blank e7440e062faa03f_16% Income before income tax $94,160 $156,800 $fill in the blank e7440e062faa03f_17 fill in the blank e7440e062faa03f_18% Income tax expense 26,400 47,000 fill in the blank e7440e062faa03f_19 fill in the blank e7440e062faa03f_20% Net income $67,760 $109,800 $fill in the blank e7440e062faa03f_21 fill in the blank e7440e062faa03f_22%

Horizontal Analysis of Income Statement 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 $768,565 $665,000 Cost of goods sold 554,400 420,000 Gross profit $214,165 $245,000 Selling expenses $78,400 $56,000 Administrative expenses 45,080 35,000 Total operating expenses $123,480 $91,000 Income from operations $90,685 $154,000 Other revenue 3,475 2,800 Income before income tax $94,160 $156,800 Income tax expense 26,400 47,000 Net income $67,760 $109,800 Required: 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, 20Y2 and 20Y1 20Y2 20Y1 Difference - Amount Difference - Percent Sales $768,565 $665,000 $fill in the blank e7440e062faa03f_1 fill in the blank e7440e062faa03f_2% Cost of goods sold 554,400 420,000 fill in the blank e7440e062faa03f_3 fill in the blank e7440e062faa03f_4% Gross profit $214,165 $245,000 $fill in the blank e7440e062faa03f_5 fill in the blank e7440e062faa03f_6% Selling expenses $78,400 $56,000 $fill in the blank e7440e062faa03f_7 fill in the blank e7440e062faa03f_8% Administrative expenses 45,080 35,000 fill in the blank e7440e062faa03f_9 fill in the blank e7440e062faa03f_10% Total operating expenses $123,480 $91,000 $fill in the blank e7440e062faa03f_11 fill in the blank e7440e062faa03f_12% Income from operations $90,685 $154,000 $fill in the blank e7440e062faa03f_13 fill in the blank e7440e062faa03f_14% Other revenue 3,475 2,800 fill in the blank e7440e062faa03f_15 fill in the blank e7440e062faa03f_16% Income before income tax $94,160 $156,800 $fill in the blank e7440e062faa03f_17 fill in the blank e7440e062faa03f_18% Income tax expense 26,400 47,000 fill in the blank e7440e062faa03f_19 fill in the blank e7440e062faa03f_20% Net income $67,760 $109,800 $fill in the blank e7440e062faa03f_21 fill in the blank e7440e062faa03f_22%

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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Question

Horizontal Analysis of Income Statement

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	$768,565	$665,000
Cost of goods sold	554,400	420,000
Gross profit	$214,165	$245,000
Selling expenses	$78,400	$56,000
Administrative expenses	45,080	35,000
Total operating expenses	$123,480	$91,000
Income from operations	$90,685	$154,000
Other revenue	3,475	2,800
Income before income tax	$94,160	$156,800
Income tax expense	26,400	47,000
Net income	$67,760	$109,800

Required:

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, 20Y2 and 20Y1
	20Y2	20Y1	Difference - Amount	Difference - Percent
Sales	$768,565	$665,000	$fill in the blank e7440e062faa03f_1	fill in the blank e7440e062faa03f_2%
Cost of goods sold	554,400	420,000	fill in the blank e7440e062faa03f_3	fill in the blank e7440e062faa03f_4%
Gross profit	$214,165	$245,000	$fill in the blank e7440e062faa03f_5	fill in the blank e7440e062faa03f_6%
Selling expenses	$78,400	$56,000	$fill in the blank e7440e062faa03f_7	fill in the blank e7440e062faa03f_8%
Administrative expenses	45,080	35,000	fill in the blank e7440e062faa03f_9	fill in the blank e7440e062faa03f_10%
Total operating expenses	$123,480	$91,000	$fill in the blank e7440e062faa03f_11	fill in the blank e7440e062faa03f_12%
Income from operations	$90,685	$154,000	$fill in the blank e7440e062faa03f_13	fill in the blank e7440e062faa03f_14%
Other revenue	3,475	2,800	fill in the blank e7440e062faa03f_15	fill in the blank e7440e062faa03f_16%
Income before income tax	$94,160	$156,800	$fill in the blank e7440e062faa03f_17	fill in the blank e7440e062faa03f_18%
Income tax expense	26,400	47,000	fill in the blank e7440e062faa03f_19	fill in the blank e7440e062faa03f_20%
Net income	$67,760	$109,800	$fill in the blank e7440e062faa03f_21	fill in the blank e7440e062faa03f_22%

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