For 20Y2, McDade Company reported a decline in net income. At the end of the year,...

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Accounting

For 20Y2, McDade Company reported a decline in net income. Atthe end of the year, T. Burrows, the president, is presented withthe following condensed comparative income statement:
McDade Company
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
1
20Y2
20Y1
2
Sales
$7,750,400.00
$6,920,000.00
3
Cost of goods sold
2,791,067.00
2,306,667.00
4
Gross profit
$4,959,333.00
$4,613,333.00
5
Selling expenses
$1,187,500.00
$950,000.00
6
Administrative expenses
701,100.00
570,000.00
7
Total operating expenses
$1,888,600.00
$1,520,000.00
8
Income from operations
$3,070,733.00
$3,093,333.00
9
Other income
134,400.00
120,000.00
10
Income before income tax
$3,205,133.00
$3,213,333.00
11
Income tax expense
60,000.00
50,000.00
12
Net income
$3,145,133.00
$3,163,333.00
1. Prepare a comparative income statement with horizontal analysisfor the two-year period, using 20Y1 as the base year. Use the minussign to indicate an amount or percent decrease. If required, roundpercentages to one decimal place.
2.
To the extent the data permit, comment on the significantrelationships revealed by the horizontal analysis prepared in(1).
Prepare a comparative income statement with horizontal analysisfor the two-year period, using 20Y1 as the base year. Use the minussign to indicate an amount or percent decrease. If required, roundpercentages to one decimal place.
Score: 0/77
McDade Company
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
1
Increase (Decrease)
Increase (Decrease)
2
20Y2
20Y1
Amount
Percent
3
Sales
$7,750,400.00
$6,920,000.00
4
Cost of goods sold
2,791,067.00
2,306,667.00
5
Gross profit
$4,959,333.00
$4,613,333.00
6
Selling expenses
$1,187,500.00
$950,000.00
7
Administrative expenses
701,100.00
570,000.00
8
Total operating expenses
$1,888,600.00
$1,520,000.00
9
Income from operations
$3,070,733.00
$3,093,333.00
10
Other income
134,400.00
120,000.00
11
Income before income tax
$3,205,133.00
$3,213,333.00
12
Income tax expense
60,000.00
50,000.00
13
Net income
$3,145,133.00
$3,163,333.00

Answer & Explanation Solved by verified expert

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Ans McDade Company Comparative Income Statement For the Years Ended December 31 20Y2 and 20Y1 1 Increase Decrease Increase Decrease 2 20Y2 20Y1 Amount Percent 3 Sales 775040000 692000000 830400 120 4 Cost of goods sold 279106700 230666700 484400 210 5 See Answer

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1		20Y2	20Y1
2	Sales	$7,750,400.00	$6,920,000.00
3	Cost of goods sold	2,791,067.00	2,306,667.00
4	Gross profit	$4,959,333.00	$4,613,333.00
5	Selling expenses	$1,187,500.00	$950,000.00
6	Administrative expenses	701,100.00	570,000.00
7	Total operating expenses	$1,888,600.00	$1,520,000.00
8	Income from operations	$3,070,733.00	$3,093,333.00
9	Other income	134,400.00	120,000.00
10	Income before income tax	$3,205,133.00	$3,213,333.00
11	Income tax expense	60,000.00	50,000.00
12	Net income	$3,145,133.00	$3,163,333.00