Prepare income statement with horizontal analysis

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Question - Horizontal Analysis of Income Statement - For 20Y2, Macklin Inc. reported a significant decrease in net income. At the end of the year, John Mayer, the president, is presented with the following condensed comparative income statement:

Macklin Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1

 

20Y2

20Y1

Sales

$644,025

$589,000

Cost of goods sold

(444,000)

(370,000)

Gross profit

$200,025

$219,000

Selling expenses

$(62,500)

$(50,000)

Administrative expenses

(36,580)

(31,000)

Total operating expenses

$(99,080)

$(81,000)

Operating income

$100,945

$138,000

Other revenue

3,063

2,500

Income before income tax expense

$104,008

$140,500

Income tax expense

(29,100)

(42,200)

Net income

$74,908

$98,300

Required - Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y1 as the base year. Use the minus sign to indicate a decrease in the "Increase/(Decrease)" columns. If required, round percentages to one decimal place.

Reference no: EM133077622

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