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 $ 16,800,000 $ 15,000,000 Cost of goods sold (11,500,000) (10,000,000) Gross profit $ 5,300,000 $ 5,000,000 Selling expenses $ (1,770,000) $ (1,500,000) Administrative expenses (1,220,000) (1,000,000) Total operating expenses $ (2,990,000) $ (2,500,000) Operating income $ 2,310,000 $ 2,500,000 Other revenue 256,950 225,000 Income before income tax expense $ 2,566,950 $ 2,725,000 Income tax expense (1,413,000) (1,500,000) Net income $ 1,153,950 $ 1,225,000 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. For those boxes in which you must enter subtracted or negative numbers use a minus sign. (Picture attached for the chart)
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 $ 16,800,000 $ 15,000,000 Cost of goods sold (11,500,000) (10,000,000) Gross profit $ 5,300,000 $ 5,000,000 Selling expenses $ (1,770,000) $ (1,500,000) Administrative expenses (1,220,000) (1,000,000) Total operating expenses $ (2,990,000) $ (2,500,000) Operating income $ 2,310,000 $ 2,500,000 Other revenue 256,950 225,000 Income before income tax expense $ 2,566,950 $ 2,725,000 Income tax expense (1,413,000) (1,500,000) Net income $ 1,153,950 $ 1,225,000 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. For those boxes in which you must enter subtracted or negative numbers use a minus sign. (Picture attached for the chart)
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter9: Metric-analysis Of Financial Statements
Section: Chapter Questions
Problem 9.17E: Profitability metrics The following selected data were taken from the financial statements of The...
Related questions
Question
100%
Horizontal analysis of income statement
(What did I do wrong? Anyone know the correct answers to the ones I got wrong?)
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 | $ 16,800,000 | $ 15,000,000 |
| Cost of goods sold | (11,500,000) | (10,000,000) |
| Gross profit | $ 5,300,000 | $ 5,000,000 |
| Selling expenses | $ (1,770,000) | $ (1,500,000) |
| Administrative expenses | (1,220,000) | (1,000,000) |
| Total operating expenses | $ (2,990,000) | $ (2,500,000) |
| Operating income | $ 2,310,000 | $ 2,500,000 |
| Other revenue | 256,950 | 225,000 |
| Income before income tax expense | $ 2,566,950 | $ 2,725,000 |
| Income tax expense | (1,413,000) | (1,500,000) |
| Net income | $ 1,153,950 | $ 1,225,000 |
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. For those boxes in which you must enter subtracted or negative numbers use a minus sign. (Picture attached for the chart)
Transcribed Image Text:2. BE 14.06 ALGO
McDade Company
Comparative Income Statement
3. BE 14.07 ALGO
For the Years Ended December 31, 20Y2 and 20Y1
Increase/(Decrease)
4. EX 14 05
20Y2
20Y1
Amount
Percent
16.800.000 v
11.500.000 x
5. EX 14.06 ALGO
15.000.000
10.000.000 x
Sales
1000.000.00
12.00
Cost of goods sold
1.500.000.00 v
15.0 v
6. EX 14.07 ALGO
Gross profit
5.000.000 v 300.000.00
6.0 v
5.300.000
7. PR.14.01A
1.770.000 x s 1.500.000 xS 270.000.00 v
18.0
22.0 v%
Selling expenses
8. PR14.0SA
Administrative expenses
1.220,000 X
220.000.00V
1.000,000 X
Total operating expenses
2.990.000 x
2.500.000 X
490.000.00
19.6 v
Operating income
2310.000
2.500,000 v s 190.000.00 v
1.6 v
254.950
225.000 V
31950.00
Other revenue
142
Income before income tax expense
2.566.950
2.725.000 v
158.050.00
Income tax expense
1413.000 x
1.500.000 x
47.000.00 v
Net income
1.153.950
1.225.000
-71.050.00
Check My Work
Previous
Next
Progress: 7/ items
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Financial & Managerial Accounting
Accounting
ISBN:
9781285866307
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning