Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Chapter 14 Homework ........... Horizontal Analysis of Income Statement For 20Y2, Macklin Inc. reported a significant decrease in net income. At the end of the

Chapter 14 Homework

image text in transcribedimage text in transcribed...........

Horizontal Analysis of Income Statement For 20Y2, Macklin Inc. reported a significant decrease 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 $451,962 $399,000 (250,000) Cost of goods sold (320,000) Gross profit $131,962 $149,000 Selling expenses $(34,000) $(45,900) (26,290) Administrative expenses (21,000) Total operating expenses $(72,190) $(55,000) Operating income $59,772 $94,000 Other revenue 2,173 1,700 Income before income tax expense $61,945 $95,700 Income tax expense (17,300) (28,700) Net income $44,645 $67,000 Required: 1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y1 as the base year. Use the minus sign to indicate a decrease in the "Increase/(Decrease)" columns. If required, round percentages to one decimal place. Macklin Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 Increase (Decrease) 20Y2 20Y1 Amount Sales $451,962 $399,000 $ 210,000 X 1 Cost of goods sold (320,000) (250,000) Gross profit $131,962 $149,000 $ Selling expenses $(45,900) $(34,000) $ Administrative expenses (26,290) (21,000) Increase/ (Decrease) Percent 30.0 % X Total operating expenses $(72,190) $(55,000) Operating income $59,772 2,173 $94,000 $ 1,700 Other revenue QQQQUU Income before income tax expense $61,945 (17,300) $95,700 $ (28,700) Income tax expense Net income $44,645 $67,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

A Textbook Of Cost And Management Accounting

Authors: Arora

10th Edition

9789325956209

More Books

Students also viewed these Accounting questions