Horizontal analysis of income statement For 2012, McDade Company reported a dedine 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, 2012 and 2011 Sales Cost of goods sold Gress prof Selling expenses Administrative expenses Total operating expenses Operating income Other revenue Income before income tax expense Income tax expense Net income 2012 $10,800,000 2011 $15,000,000 (11,500,000) (10,000,000) $5,100,000 $5,000,000 $(1,770,000) $1,500,000) (1,220,000) (1,000,000) $2,900,000) $2,500,000) $2,310,000 $2,500,000 256,950 $2,566,950 (1,413,000) (1,500,000) 225,000 $2,725,000 $1,153,950 $1,225,000 3. Prepare a comparative income statement with horizontal analysis for the two-year period, saing 2011 as the base year. Round percentages to one decimal place for these boxes in which you must enter subcorative numbers use a minus sign McDade Company Comparative Income Statement For the Years Ended December 31, 2013 and 201 Line Item Description Sales 2011 Increase/(Decrease) Increase/(Decrease) Amount Percent Cost of goods sold Ores prof Total sperating expense Operating in 1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 2011 as the base year: Round percentages to one decimal place. For those bows in which you must enter subtracted or negative numbers use a minus sign McDade Company Comparative Income Statement For the Years Ended December 31, 2012 and 2011 Line Item Description Sales 2012 2011 Increase/(Decrease) Increase/(Decrease) Amount Percent Cost of goods sold Gro Administrative expenses Tital operating expenses Operating inco Other revenue Income tax expense incom 2. To the extent the data permit, comment on the significant relationships revealed by the horizontal analysis prepared in () font of goods seld has 2011 to 2012. Sales hav ta fater rate than sales ing the gross profit te increase at and expenses that are higher than the increase in sales have caused the note t pace thas 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 2. To the extent the data permit, comment on the significant relationships arch Net income has l addition, total of dedined increased from 2011 to 2012. Sales have) at a faster r Check My Work 4 more Check My Work uses remaining 12 23 . C D 176 # C- 54 #3 92 W E R 95 T A 6 ense % 96 %6 96 % 96 mit, comment on the significant relationships revealed by the horizontal analysis prepar penses have from 2011 to 2012. Sales have ( at a fast increased decreased ; however, the cost of g in co My Work uses remaining O D % 96 46 5 C- F7 79 710 WAY A ^ 20 & * 6 7 8 9 T Y U % % % % 4 % % % by the horizontal analysis prepared in (1). however, the cost of goods sold has sales, in costs and expe increased decreased arer causing the gross p han the increase in sal 9 F10 430 711 412 Scr Lk PrtSc SysRq Pause Break www D ) + 6 0 0 P 11 B gross profit to increase at a e in sales have caused the r slower faster pace than sales. In Total operating expenses Operating income Other revenue Income before income tax expense Income tax expense Net income 000000 000000 69 2. To the extent the data permit, comment on the significant relati Net income has from 20Y1 to 20Y2. Sales h. addition, total operating expenses have l at a increased decreased Check My Work 4 more Check My Work C ease/(Decrease) Increase/(Decrease) Amount Percent % % % % % % % % % % B relationships revealed by the horizontal analysis prepared in (1). ales have at a faster rate than sales. ; however, the cost of goods sold has in costs and expenses that Increases Decreases t to increase at a have caused the net income to decline increase pace than sales. In Next> Email Instructor Save and Exit Submit Assignment for Grading 209 P 68F Mostly clear ^ 04 14/9/20