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Horizontal Analysis of Income Statement For 20Y2, McDade Company reported a decline in net income. At the end of the year, T. Burrows, the president,
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Horizontal Analysis of Income Statement
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 $876,180 $750,000 Cost of goods sold 629,800 470,000 Gross profit $246,380 $280,000 Selling expenses $89,780 $63,000 Administrative expenses 52,240 40,000 Total operating expenses $142,020 $103,000 Income from operations $104,360 $177,000 Other income 3,850 3,200 Income before income tax $108,210 $180,200 Income tax expense 30,300 54,100 Net income $77,910 $126,100 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 "Difference" columns. If required, round to one decimal place.
McDade Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Difference - Amount Difference - Percent Sales $876,180 $750,000 $ % Cost of goods sold 629,800 470,000 % Gross profit $246,380 $280,000 $ % Selling expenses $89,780 $63,000 $ % Administrative expenses 52,240 40,000 % Total operating expenses $142,020 $103,000 $ % Income from operations $104,360 $177,000 $ % Other income 3,850 3,200 % Income before income tax $108,210 $180,200 $ % Income tax expense 30,300 54,100 % Net income $77,910 $126,100 $ % Feedback
2. Net income has
- increased
- decreased
- increased
- decreased
- increased
- decreased
- increase
- decrease
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