Horizontal Analysis of Income StatementFor 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 condensedcomparative income statement:Macklin Inc.Comparative Income StatementFor the Years Ended December 31, 20Y2 and 20Y120Y2 20Y1Sales $910,000 $700,000Cost of goods sold 441,000 350,000Gross profit $469,000 $350,000Selling expenses $139,150 $115,000Administrative expenses 99,450 85,000Total operating expenses $238,600 $200,000Income from operations $230,400 $150,000Other income 65,000 50,000Income before income tax $295,400 $200,000Income tax expense 65,000 50,000Net income $230,400 $150,000Required:1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y1 as the base year. Round to one decimal place. Use theminus sign to indicate a decrease in the "Difference" columns.Macklin Inc.Comparative Income StatementFor the Years Ended December 31, 20Y2 and 20Y120Y2 20Y1 Difference - Amount Difference - PercentSales $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 $ %2. Net income hasfrom 20Y1 to 20Y2. Net sales have ; however, cost of goods sold, selling, and administrative expenses have at arate, causing .
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
comparative income statement:
Macklin Inc.
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
Required:
1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y1 as the base year. Round to one decimal place. Use the
minus sign to indicate a decrease in the "Difference" columns.
Macklin Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Y2 20Y1 Difference - Amount Difference - Percent
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 $ %
2. Net income has
from 20Y1 to 20Y2. Net sales have ; however, cost of goods sold, selling, and administrative expenses have at a
rate, causing .
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