Horizontal analysis of income statement For 2012, McDade Company reported a decline in net income. At...

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Horizontal analysis of income statement For 2012, McDade Company reported a decline in net income. At the end of the year, T. Burrows, the president, is presented with the following conden McDade Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 2012 Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Operating Income Other revenue Income before incom tax expense Income tax expense Net Income Line Item Description Sales Cost of goods sold Gross profit Selling expenses $16,800,000 (11,500,000) $5,300,000 1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 2011 as the base year. Round percentages to one decimal place. Fom negative numbers use a minus sign. Administrative expenses Total operating expenses Operating income Other revenue Income before income tax expense Income tax expense Check My Work $(1,770,000) (1,220,000) $(2,990,000) $(2,500,000) $2,310,000 $2,500,000 256,950 225,000 $2,566,950 (1,413,000) $1,153,950 20Y1 $15,000,000 (10,000,000) $5,000,000 $(1,500,000) (1,000,000) McDade Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 2012 16,800,000 11,500,000 X 5,300,000 1,770,000 X 1,220,000 X 2,990,000 X $2,725,000 (1,500,000) $1,225,000 211,000 X 2011 15,000,000 10,000,000 X 5,000,000 1,500,000 X 1,000,000 X 2,500,000 X Increase/(Decrease) Increase/(Decrease) Amount Percent 1,800,000 1,100,000 300,000 270,000 220,000 490,000 12.0 -150 X % 60 % 18.0 X % -320 X % -19.6 X % % % % eBook Line Item Description Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Operating income Other revenue Income before income tax expense Income tax expense Net Income hedak Show Me How 2012 14,300,000 11,300,000 X 5,300.000 1,770000 X S 1220000 X 2.990.000 Xs 231,000 X 2011 11,000,000 18,000,000 X 100000 Feedback 1,000,000 X 1,300,000 X L 300000 2000 2200 4000 XX 158 74438 72049 344 Check My Wons Calculate the change in the amount and divide by the base (older) vear amount to determine the horizontal analys percentages 2. To the extent the data permit, comment on the significant relationships revealed by the horizontal analysis prepared in (1) Net income has i from 2011 to 2012. Sales have than sales. In addition, total operating expenses have t a faster rate than sales however, the cost of goods said has cing the grese princ in costs and expenses that are higher than the inve Horizontal analysis of income statement For 2012, McDade Company reported a decline in net income. At the end of the year, T. Burrows, the president, is presented with the following conden McDade Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 2012 Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Operating Income Other revenue Income before incom tax expense Income tax expense Net Income Line Item Description Sales Cost of goods sold Gross profit Selling expenses $16,800,000 (11,500,000) $5,300,000 1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 2011 as the base year. Round percentages to one decimal place. Fom negative numbers use a minus sign. Administrative expenses Total operating expenses Operating income Other revenue Income before income tax expense Income tax expense Check My Work $(1,770,000) (1,220,000) $(2,990,000) $(2,500,000) $2,310,000 $2,500,000 256,950 225,000 $2,566,950 (1,413,000) $1,153,950 20Y1 $15,000,000 (10,000,000) $5,000,000 $(1,500,000) (1,000,000) McDade Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 2012 16,800,000 11,500,000 X 5,300,000 1,770,000 X 1,220,000 X 2,990,000 X $2,725,000 (1,500,000) $1,225,000 211,000 X 2011 15,000,000 10,000,000 X 5,000,000 1,500,000 X 1,000,000 X 2,500,000 X Increase/(Decrease) Increase/(Decrease) Amount Percent 1,800,000 1,100,000 300,000 270,000 220,000 490,000 12.0 -150 X % 60 % 18.0 X % -320 X % -19.6 X % % % % eBook Line Item Description Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Operating income Other revenue Income before income tax expense Income tax expense Net Income hedak Show Me How 2012 14,300,000 11,300,000 X 5,300.000 1,770000 X S 1220000 X 2.990.000 Xs 231,000 X 2011 11,000,000 18,000,000 X 100000 Feedback 1,000,000 X 1,300,000 X L 300000 2000 2200 4000 XX 158 74438 72049 344 Check My Wons Calculate the change in the amount and divide by the base (older) vear amount to determine the horizontal analys percentages 2. To the extent the data permit, comment on the significant relationships revealed by the horizontal analysis prepared in (1) Net income has i from 2011 to 2012. Sales have than sales. In addition, total operating expenses have t a faster rate than sales however, the cost of goods said has cing the grese princ in costs and expenses that are higher than the inve

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