For 20Y3, Greyhound Technology Company reported its most significant decline in net income in years. At...

 

Transcribed Image Text:

For 20Y3, Greyhound Technology Company reported its most significant decline in net income in years. At the end of the year, Duane Vogel, the president, is presented with the following condensed comparative income statement: GREYHOUND TECHNOLOGY COMPANY Comparative Income Statement For the Years Ended December 31, 20Y3 and 20Y2 20Y3 20Υ2 Sales S880,000 $800,000 15,000 $785,000 500,000 $285,000 $ 40,000 25,000 $ 65,000 Sales returns and allowances 18,000 $862,000 650,000 Net sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Income from operations Other income $212,000 $ 44,000 27,000 $ 71,000 $141,000 $220,000 2,300 $143,300 2,000 Income before income tax $222,000 Income tax expense 13,000 20,000 Net income $130,300 $202,000 Instructions 1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y2 as the base year. Round to one decimal place. 2. To the extent the data permit, comment on the significant relationships revealed by the horizontal analysis prepared in (1). For 20Y3, Greyhound Technology Company reported its most significant decline in net income in years. At the end of the year, Duane Vogel, the president, is presented with the following condensed comparative income statement: GREYHOUND TECHNOLOGY COMPANY Comparative Income Statement For the Years Ended December 31, 20Y3 and 20Y2 20Y3 20Υ2 Sales S880,000 $800,000 15,000 $785,000 500,000 $285,000 $ 40,000 25,000 $ 65,000 Sales returns and allowances 18,000 $862,000 650,000 Net sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Income from operations Other income $212,000 $ 44,000 27,000 $ 71,000 $141,000 $220,000 2,300 $143,300 2,000 Income before income tax $222,000 Income tax expense 13,000 20,000 Net income $130,300 $202,000 Instructions 1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y2 as the base year. Round to one decimal place. 2. To the extent the data permit, comment on the significant relationships revealed by the horizontal analysis prepared in (1).