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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
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 | $373,554 | $342,000 | |
Cost of goods sold | (264,000) | (220,000) | |
Gross profit | $109,554 | $122,000 | |
Selling expenses | $(36,250) | $(29,000) | |
Administrative expenses | (21,240) | (18,000) | |
Total operating expenses | $(57,490) | $(47,000) | |
Operating income | $52,064 | $75,000 | |
Other revenue | 1,746 | 1,400 | |
Income before income tax expense | $53,810 | $76,400 | |
Income tax expense | (15,100) | (22,900) | |
Net income | $38,710 | $53,500 |
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 | ||||
20Y2 | 20Y1 | Increase/ (Decrease) Amount | Increase/ (Decrease) Percent | |
Sales | $373,554 | $342,000 | $ | % |
Cost of goods sold | (264,000) | (220,000) | % | |
Gross profit | $109,554 | $122,000 | $ | % |
Selling expenses | $(36,250) | $(29,000) | $ | % |
Administrative expenses | (21,240) | (18,000) | % | |
Total operating expenses | $(57,490) | $(47,000) | ||
Operating income | $52,064 | $75,000 | $ | % |
Other revenue | 1,746 | 1,400 | % | |
Income before income tax expense | $53,810 | $76,400 | $ | |
Income tax expense | (15,100) | (22,900) | ||
Net income | $38,710 | $53,500 | $ | % |
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