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 ago
Next > < Previous

Related 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...
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 $526,224 $456,000 Cost of goods sold 382,800 290,000 Gross profit $143,424 $166,000 Selling expenses $53,200 $38,000 Administrative expenses 30,910 24,000 Total operating expenses $84,110 $62,000 Income from operations $59,314...
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...
The net income reported on the income statement of CamilloX Inc. for the current year was...
The net income reported on the income statement of CamilloX Inc. for the current year was $150,000. Depreciation recorded on equipment and building amounted to $45,000 for the year.  Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: Account End of Year Beginning of Year Cash 42,875 36,250 Trade Receivables (net) 147,500 137,500 Inventories 109,375 93,750 Prepaid Expenses 9,250 11,875 Accounts Payable 57,000 40,000 Salaries Payable 7,625 10,625 Dividends Payable...
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...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT