90.2K

Verified Solution

Link Copied!

please show the work

Horizontal Analysis of Income Statement For 2012, McDade Company reported a decline in net income. At the end of the year, T. Burrows, the president, is presented with the follow- ing condensed comparative income statement: McDade Company Compartive Income Statement For the Years Ended December 31, 20Y2 and 2041 Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Income from operations Other revenue Income before income tax Income tax expense Net income 20Y2 $840,333 601,600 $238,733 $83,700 48.830 $132,530 $106,203 3,884 $110,087 30,800 $79,287 2011 $741,000 470,000 $271,000 $62,000 39,000 $101,000 $170,000 3,100 $173,100 51,900 $121,200 Required: 1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y1 as the base year. Round percentages to one decimal place. Use the minus sign to indicate a decrease in the "Increase (Decrease)" columns. McDade Company Comparative Income Statement For the Years Ended December 31, 2012 and 2011 2012 Difference - Difference - 2011 Amount Percent Sales $340,333 $741,000 Cost of goods sold 601,600 470,000 Gross pranit $238,733 $271,000 Selling expenses $83,700 $62,000 Administrative expenses 48,830 39,000 Total operating expenses $132,530 $101,000 Income from operations - $106,203 $170,000 LLLLLLLLL 9% Other revenue 3,884 3,100 % Income before income $110,087 $173,100 tax Income tax expense 30,800 51,900 Net Income $79,287 $121,200 % 2. Net income has from 20Y1 to 20Y2. Sales have ; however, the cost of goods sold has , causing the gross profit to

Answer & Explanation Solved by verified expert

See Answer