Question
Asked Jan 2, 2020
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For 20Y2, Macklin Inc. reported a significant increase in net income. At the end of the year, John Mayer, the president, is presented with the following condensed comparative income statement:

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Instructions
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.
2. To the extent the data permit, comment on the significant relationships revealed by the horizontal analysis prepared in (1).

Macklin Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 2OY1
20Υ2
20Υ1
Sales ....
$910,000
$700,000
Cost of goods sold..
Gross profit ...
441,000
350,000
$469,000
$350,000
$ 139,150
Selling expenses
Administrative expenses..
Total operating expenses
Income from operations ..
$115,000
85,000
99,450
$238,600
$200,000
$230,400
$150,000
Other revenue
50,000
65,000
Income before income tax
$295,400
$200,000
Income tax expense .
65,000
50,000
$230,400
$150,000
Net income ...
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Macklin Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 2OY1 20Υ2 20Υ1 Sales .... $910,000 $700,000 Cost of goods sold.. Gross profit ... 441,000 350,000 $469,000 $350,000 $ 139,150 Selling expenses Administrative expenses.. Total operating expenses Income from operations .. $115,000 85,000 99,450 $238,600 $200,000 $230,400 $150,000 Other revenue 50,000 65,000 Income before income tax $295,400 $200,000 Income tax expense . 65,000 50,000 $230,400 $150,000 Net income ...

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Expert Answer

Step 1

1. Prepare a comparative income statement with horizontal analysis for the two years period using 20X1 as base year as shown below:

Accounting homework question answer, step 1, image 1
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Step 2

Calculation formulas:...

Accounting homework question answer, step 2, image 1
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