Horizontal Analysis of Income Szatement For 20Y2, McDade Company reported a decl
ID: 2554673 • Letter: H
Question
Horizontal Analysis of Income Szatement 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 comparatve income McDade Company For the Years Ended December 31, 20Y2 and 20Y 268,400 220,000 $108,448 122,000 operating expenses 58,540 $47,000 Income before income tax 37,178 $53,500 1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y as the base year. Use the minus sign to indicate a decrease in the "Difference columns. if required, round to one decimal place For the Years Ended December 31 20Y2 20Y1 Difference Amount Dfference Percent 268,400 220,000 Total operating expenses $58,540 $47.000 Income from operations $49,908 $5,000 Income before income tax $51,678 $6,400Explanation / Answer
Net income has decreased by 30.51% from 20Y1 to 20Y2. Sales have increased by 10.19%, however, cost of goods sold has increased by 22.0%, causing gross profit to decrease by 11.11%.
20Y2 20Y1 Difference Amount % Sales 376848 342000 34848 10.19% Cost of goods sold 268400 220000 48400 22.00% Gross Profit 108448 122000 -13552 -11.11% Selling expenses 36980 29000 7980 27.52% Administrative Expenses 21560 18000 3560 19.78% Total operating Expenses 58540 47000 11540 24.55% Income from operations 49908 75000 -25092 -33.46% Other Income 1770 1400 370 26.43% Income before income tax 51678 76400 -24722 -32.36% Income tax expense 14500 22900 -8400 -36.68% Net income 37178 53500 -16322 -30.51%Related Questions
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