Requirement 1. Prepare a horizontal analysis of the comparative income statement of McCormick Designs, Inc. Round percentage changes to one decimal place. (Round the percentages to one decimal place, X.X%. Use a minus sign or parentheses to indicate a decrease.) McCormick Designs, Inc.Comparative Income StatementYears Ended December 31, 2024 and 2023 Increase (Decrease) 20242023AmountPercentageNet Sales Revenue$429,000$373,750 %Expenses: Cost of Goods Sold204,000190,450 %Selling and Administrative Expenses96,00091,050 %Other Expenses7,4505,750 %Total Expenses307,450287,250 %Net Income$121,550$86,500 %Requirement 2. Why did 2024 net income increase by a higher percentage than net sales revenue? Net income increased by a higher percentage than total net sales revenue during 2024 because▼ .

Answered: Requirement 1. Prepare a horizontal…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter24: Analysis Of Financial Statements

Section: Chapter Questions

Problem 9SPA

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Requirement 1. Prepare a horizontal analysis of the comparative income statement of McCormick Designs, Inc. Round percentage changes to one decimal place. (Round the percentages to one decimal place, X.X%. Use a minus sign or parentheses to indicate a decrease.)

McCormick Designs, Inc.
Comparative Income Statement
Years Ended December 31, 2024 and 2023
			Increase (Decrease)
	2024	2023	Amount	Percentage
Net Sales Revenue	$429,000	$373,750			%
Expenses:
Cost of Goods Sold	204,000	190,450			%
Selling and Administrative Expenses	96,000	91,050			%
Other Expenses	7,450	5,750			%
Total Expenses	307,450	287,250			%
Net Income	$121,550	$86,500			%

Requirement 2. Why did 2024 net income increase by a higher percentage than net sales revenue?

Net income increased by a higher percentage than total net sales revenue during 2024 because

▼

Expert Solution

Step 1

In the given question, we are supposed to prepare a horizontal analysis of the comparative income statement.

comparative income statement helps us to identify financial trends and measure performance.

Where the year 2024 will considered as a Current Year and 2023 will be considered as a base year.

Amount of difference will be increase or decrease from current to base year.

Percentage change can be calculated by amount of difference divided by Base year.

The comparative income statement is provided below.

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