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Horizontal analysis of income statement For 2 0 Y 2 , Macklin Inc. reported a significant decrease in net income. At the end of the
Horizontal analysis of income statement
For Y 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 Y and Y
Line Item Description YY
Sales $ $
Cost of goods sold
Gross profit $ $
Selling expenses $ $
Administrative expenses
Total operating expenses $ $
Operating income $ $
Other revenue
Income before income tax expense $ $
Income tax expense
Net income $ $
Required:
Question Content Area
Prepare a comparative income statement with horizontal analysis for the twoyear period, using Y as the base year. Use the minus sign to indicate a decrease in the "IncreaseDecrease columns. If required, round percentages to one decimal place.
Macklin Inc.
Comparative Income Statement
For the Years Ended December Y and Y
Line Item Description
Y
Y Increase
Decrease
Amount Increase
Decrease
Percent
Sales $ $ $Sales
Sales
Cost of goods sold Cost of goods sold
Cost of goods sold
Gross profit $ $ $Gross profit
Gross profit
Selling expenses $ $ $Selling expenses
Selling expenses
Administrative expenses Administrative expenses
Administrative expenses
Total operating expenses $ $ $Total operating expenses
Total operating expenses
Operating income $ $ $Operating income
Operating income
Other revenue Other revenue
Other revenue
Income before income tax expense $ $ $Income before income tax expense
Income before income tax expense
Income tax expense Income tax expense
Income tax expense
Net income $ $ $Net income
Net income
Question Content Area
Net income has fill in the blank of
from Y to Y Sales have fill in the blank of
; however, the cost of goods sold has fill in the blank of
at a faster rate than sales, causing the gross profit to fill in the blank of
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