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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
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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 $489,402 $408,000 Cost of goods sold 364,000 260,000 Gross profit $125,402 $148,000 Selling expenses $51,000 $34,000 Administrative expenses 29,920 22,000 Total operating expenses $80,920 $56,000 Income from operations $44,482 $92,000 Other revenue 2,055 1,700 Income before income tax $46,537 $93,700 Income tax expense 13,000 28,100 Net income $33,537 $65,600
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 $489,402 $408,000 $ % Cost of goods sold 364,000 260,000 % Gross profit $125,402 $148,000 $ % Selling expenses $51,000 $34,000 $ % Administrative expenses 29,920 22,000 % Total operating expenses $80,920 $56,000 $ % Income from operations $44,482 $92,000 $ % Other revenue 2,055 1,700 % Income before income tax $46,537 $93,700 $ % Income tax expense 13,000 28,100 % Net income $33,537 $65,600 $ %
Feedback
2. Net income has
- increased
- decreased
from 20Y1 to 20Y2. Sales have - increased
- decreased
; however, the cost of goods sold has - increased
- decreased
, causing the gross profit to - increase
- decrease
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 | $489,402 | $408,000 | |
Cost of goods sold | 364,000 | 260,000 | |
Gross profit | $125,402 | $148,000 | |
Selling expenses | $51,000 | $34,000 | |
Administrative expenses | 29,920 | 22,000 | |
Total operating expenses | $80,920 | $56,000 | |
Income from operations | $44,482 | $92,000 | |
Other revenue | 2,055 | 1,700 | |
Income before income tax | $46,537 | $93,700 | |
Income tax expense | 13,000 | 28,100 | |
Net income | $33,537 | $65,600 |
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 | $489,402 | $408,000 | $ | % |
Cost of goods sold | 364,000 | 260,000 | % | |
Gross profit | $125,402 | $148,000 | $ | % |
Selling expenses | $51,000 | $34,000 | $ | % |
Administrative expenses | 29,920 | 22,000 | % | |
Total operating expenses | $80,920 | $56,000 | $ | % |
Income from operations | $44,482 | $92,000 | $ | % |
Other revenue | 2,055 | 1,700 | % | |
Income before income tax | $46,537 | $93,700 | $ | % |
Income tax expense | 13,000 | 28,100 | % | |
Net income | $33,537 | $65,600 | $ | % |
Feedback
2. Net income has
- increased
- decreased
- increased
- decreased
- increased
- decreased
- increase
- decrease
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