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 $768,565   $665,000 Cost of goods sold 554,400   420,000 Gross profit $214,165   $245,000 Selling expenses $78,400   $56,000 Administrative expenses 45,080   35,000 Total operating expenses $123,480   $91,000 Income from operations $90,685   $154,000 Other revenue 3,475   2,800 Income before income tax $94,160   $156,800 Income tax expense 26,400   47,000 Net income $67,760   $109,800 Required: 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. Use the minus sign to indicate a decrease in the "Increase (Decrease)" columns. McDade Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1   20Y2 20Y1 Difference - Amount Difference - Percent Sales $768,565 $665,000 $fill in the blank e7440e062faa03f_1 fill in the blank e7440e062faa03f_2% Cost of goods sold 554,400 420,000 fill in the blank e7440e062faa03f_3 fill in the blank e7440e062faa03f_4% Gross profit $214,165 $245,000 $fill in the blank e7440e062faa03f_5 fill in the blank e7440e062faa03f_6% Selling expenses $78,400 $56,000 $fill in the blank e7440e062faa03f_7 fill in the blank e7440e062faa03f_8% Administrative expenses 45,080 35,000 fill in the blank e7440e062faa03f_9 fill in the blank e7440e062faa03f_10% Total operating expenses $123,480 $91,000 $fill in the blank e7440e062faa03f_11 fill in the blank e7440e062faa03f_12% Income from operations $90,685 $154,000 $fill in the blank e7440e062faa03f_13 fill in the blank e7440e062faa03f_14% Other revenue 3,475 2,800 fill in the blank e7440e062faa03f_15 fill in the blank e7440e062faa03f_16% Income before income tax $94,160 $156,800 $fill in the blank e7440e062faa03f_17 fill in the blank e7440e062faa03f_18% Income tax expense 26,400 47,000 fill in the blank e7440e062faa03f_19 fill in the blank e7440e062faa03f_20% Net income $67,760 $109,800 $fill in the blank e7440e062faa03f_21 fill in the blank e7440e062faa03f_22%

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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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 $768,565   $665,000
Cost of goods sold 554,400   420,000
Gross profit $214,165   $245,000
Selling expenses $78,400   $56,000
Administrative expenses 45,080   35,000
Total operating expenses $123,480   $91,000
Income from operations $90,685   $154,000
Other revenue 3,475   2,800
Income before income tax $94,160   $156,800
Income tax expense 26,400   47,000
Net income $67,760   $109,800

Required:

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. Use the minus sign to indicate a decrease in the "Increase (Decrease)" columns.

McDade Company
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
  20Y2 20Y1 Difference - Amount Difference - Percent
Sales $768,565 $665,000 $fill in the blank e7440e062faa03f_1 fill in the blank e7440e062faa03f_2%
Cost of goods sold 554,400 420,000 fill in the blank e7440e062faa03f_3 fill in the blank e7440e062faa03f_4%
Gross profit $214,165 $245,000 $fill in the blank e7440e062faa03f_5 fill in the blank e7440e062faa03f_6%
Selling expenses $78,400 $56,000 $fill in the blank e7440e062faa03f_7 fill in the blank e7440e062faa03f_8%
Administrative expenses 45,080 35,000 fill in the blank e7440e062faa03f_9 fill in the blank e7440e062faa03f_10%
Total operating expenses $123,480 $91,000 $fill in the blank e7440e062faa03f_11 fill in the blank e7440e062faa03f_12%
Income from operations $90,685 $154,000 $fill in the blank e7440e062faa03f_13 fill in the blank e7440e062faa03f_14%
Other revenue 3,475 2,800 fill in the blank e7440e062faa03f_15 fill in the blank e7440e062faa03f_16%
Income before income tax $94,160 $156,800 $fill in the blank e7440e062faa03f_17 fill in the blank e7440e062faa03f_18%
Income tax expense 26,400 47,000 fill in the blank e7440e062faa03f_19 fill in the blank e7440e062faa03f_20%
Net income $67,760 $109,800 $fill in the blank e7440e062faa03f_21 fill in the blank e7440e062faa03f_22%
         
       
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