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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
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, 2012 and 2041 2012 2011 Sales $736,494 $627,000 Cost of goods sold (544,000) (400,000) Gross profit $192,494 $227,000 Selling expenses $(76,850) $(53,000) Administrative expenses (43,690) (33,000) $(120,540) $(86,000) Total operating expenses Operating income Other revenue $71,954 $141,000 3,333 2,600 Income before income tax expense $75,287 (21,100) $143,600 (43,100) Income tax expense Net income $54,187 $100,500 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 th "Increase/(Decrease)" columns. If required, round percentages to one decimal place. Macklin Inc. Comparative Income Statement For the Years Ended December 31, 2012 and 20Y1 Increase/ Increase/ (Decrease) (Decrease) 20Y2 20Y1 Amount Percent Sales $736,494 $627,000 $ % Cost of goods sold (544,000) (400,000) % Gross profit $192,494 $227,000 $ % Selling expenses $(76,850) $(53,000) $ % Administrative expenses (43,690) (33,000) % Total operating expenses $(120,540) $(86,000) % Operating income $71,954 $141,000 $ % Other revenue 3,333 2,600 % Income before income tax expense $75,287 $143,600 $ % Income tax expense (21,100) (43,100) % Net income $54,187 $100,500 $ % 2. Net income has from 20Y1 to 20Y2. Sales have ; however, the cost of goods sold has at a faster rate than sales, causing the gross profit to
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