Question
In: Accounting
Horizontal Analysis of Income Statement For 20Y2, Macklin Inc. reported a significant decrease in net income....
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, 20Y2 and 20Y1 |
|||
| 20Y2 | 20Y1 | ||
| Sales | $867,160 | $731,000 | |
| Cost of goods sold | (634,800) | (460,000) | |
| Gross profit | $232,360 | $271,000 | |
| Selling expenses | $(91,450) | $(62,000) | |
| Administrative expenses | (52,340) | (39,000) | |
| Total operating expenses | $(143,790) | $(101,000) | |
| Operating income | $88,570 | $170,000 | |
| Other revenue | 3,906 | 3,100 | |
| Income before income tax expense | $92,476 | $173,100 | |
| Income tax expense | (25,900) | (51,900) | |
| Net income | $66,576 | $121,200 | |
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 "Increase/(Decrease)" columns. If required, round percentages to one decimal place.
Solutions
Expert Solution
| Macklin Inc | ||||||||
| Comparative Income Statement | ||||||||
| For the Years Ended December 31, 20Y2 and 20Y1 | Horizontal Analysis | Calculation | ||||||
| 20Y2 | 20Y1 | Increase/(Decrease) $ | Increase/(Decrease) % | Increase/(Decrease) $ | Increase/(Decrease) % | |||
| Sales | 867,160 | 731,000 | 136,160 | 18.6% | =867,160-731,000 | =136,160/731,000*100 | ||
| Cost of goods sold | (634,800) | (460,000) | 174,800 | 38.0% | =634,800-460,000 | =174,800/460,000*100 | ||
| Gross profit | 232,360 | 271,000 | (38,640) | -14.3% | =232,360-271,000 | =38,640/271,000*100 | ||
| Selling expenses | (91,450) | (62,000) | 29,450 | 47.5% | ||||
| Administrative expenses | (52,340) | (39,000) | 13,340 | 34.2% | ||||
| Total Operating expenses | (143,790) | (101,000) | 42,790 | 42.4% | ||||
| Operating income | 88,570 | 170,000 | (81,430) | -47.9% | ||||
| Other revenue | 3,906 | 3,100 | 806 | 26.0% | ||||
| Income before income tax expense | 92,476 | 173,100 | (80,624) | -46.6% | ||||
| Income tax expense | (25,900) | (51,900) | (26,000) | -50.1% | ||||
| Net income | 66,576 | 121,200 | (54,624) | -45.1% | ||||
| Horizontal analysis formulas | ||||||||
| Increase/(Decrease) $ | Current year - Base year | |||||||
| Increase/(Decrease) % | Increase/(Decrease) $/ Base year *100 | |||||||
ekkarill92 answered 1 year agoRelated Solutions
For 20Y2, Macklin Inc. reported a significant decrease in net income. At the end of the...
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, 20Y2 and 20Y1
20Y2
20Y1
Sales
$841,340
$750,000
Cost of goods sold
(592,200)
(470,000)
Gross profit
$249,140
$280,000
Selling expenses
$(83,480)
$(63,000)
Administrative expenses
(49,360)
(40,000)
Total operating expenses
$(132,840)
$(103,000)
Operating income
$116,300
$177,000
Other revenue
4,109
3,200...
Horizontal Analysis of Income Statement For 20Y2, McDade Company reported a decline in net income. At...
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
$693,095
$579,000
Cost of goods sold
518,000
370,000
Gross profit
$175,095
$209,000
Selling expenses
$73,500
$49,000
Administrative expenses
42,160
31,000
Total operating expenses
$115,660
$80,000
Income from operations
$59,435...
Horizontal Analysis of Income Statement For 20Y2, McDade Company reported a decline in net income. At...
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
$815,178
$741,000
Cost of goods sold
573,400
470,000
Gross profit
$241,778
$271,000
Selling expenses
$79,050
$62,000
Administrative expenses
46,720
39,000
Total operating expenses
$125,770
$101,000
Income from operations
$116,008...
Horizontal Analysis of Income Statement For 20Y2, McDade Company reported a decline in net income. At...
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
$505,848
$446,000
Cost of goods sold
358,400
280,000
Gross profit
$147,448
$166,000
Selling expenses
$51,300
$38,000
Administrative expenses
30,050
24,000
Total operating expenses
$81,350
$62,000
Income from operations
$66,098...
Horizontal Analysis of Income Statement For 20Y2, McDade Company reported a decline in net income. At...
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
$501,094
$418,000
Cost of goods sold
364,000
260,000
Gross profit
$137,094
$158,000
Selling expenses
$52,500
$35,000
Administrative expenses
29,920
22,000
Total operating expenses
$82,420
$57,000
Income from operations
$54,674...
Solve the follwing problem. Horizontal analysis of income statement For 20Y2, McDade Company reported a decline...
Solve the follwing problem.
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
1
20Y2
20Y1
2
Sales
$6,787,200.00
$6,060,000.00
3
Cost of goods sold
2,444,200.00
2,020,000.00
4
Gross profit
$4,343,000.00
$4,040,000.00
5
Selling expenses
$1,125,000.00
$900,000.00
6
Administrative expenses
711,200.00...
Solve the following problem. Solve the follwing problem. Horizontal analysis of income statement For 20Y2, McDade...
Solve the following problem.
Solve the follwing problem.
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
1
20Y2
20Y1
2
Sales
$6,787,200.00
$6,060,000.00
3
Cost of goods sold
2,444,200.00
2,020,000.00
4
Gross profit
$4,343,000.00
$4,040,000.00
5
Selling expenses
$1,125,000.00
$900,000.00...
For 20Y2, McDade Company reported a decline in net income. At the end of the year,...
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
1
20Y2
20Y1
2
Sales
$7,369,600.00
$6,580,000.00
3
Cost of goods sold
2,719,733.00
2,193,333.00
4
Gross profit
$4,649,867.00
$4,386,667.00
5
Selling expenses
$1,049,600.00
$820,000.00
6
Administrative expenses
658,050.00
535,000.00
7
Total operating expenses
$1,707,650.00
$1,355,000.00
8
Income...
For 20Y2, McDade Company reported a decline in net income. At the end of the year,...
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
$361,360
$304,000
Cost of goods sold
262,200
190,000
Gross profit
$99,160
$114,000
Selling expenses
$38,350
$26,000
Administrative expenses
21,470
16,000
Total operating expenses
$59,820
$42,000
Income from operations
$39,340
$72,000
Other revenue
1,580
1,300...
For 20Y2, McDade Company reported a decline in net income. At the end of the year,...
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:
Question not attempted.
McDade Company
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
1
20Y2
20Y1
2
Sales
$16,800,000.00
$15,000,000.00
3
Cost of goods sold
11,500,000.00
10,000,000.00
4
Gross profit
$5,300,000.00
$5,000,000.00
5
Selling expenses
$1,770,000.00
$1,500,000.00
6
Administrative expenses
1,220,000.00
1,000,000.00
7
Total operating expenses
$2,990,000.00...
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