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Category > Accounting Posted 15 May 2017 My Price 8.00

Horizontal analysis for income statement

 

PR 17-1B Horizontal analysis for income statement

For 2012, McFadden Inc. reported its most significant increase in net income in years. At the end of the year, John Mayer, the president, is presented with the following condensed comparative income statement:

McFadden Inc.

    

Comparative Income Statement

    

For the Years Ended December 31, 2012 and 2011

    
 

2012

2011

Sales

$516,600

$410,000

Sales returns and allowances

12,200

10,000

Net sales

$504,400

$400,000

Cost of goods sold

240,000

200,000

Gross profit

$264,400

$200,000

Selling expenses

$ 69,600

$ 60,000

Administrative expenses

44,800

40,000

Total operating expenses

$114,400

$100,000

Income from operations

$150,000

$100,000

Other income

12,600

10,000

Income before income tax

$162,600

$110,000

Income tax expense

9,000

5,000

Net income

$153,600

$105,000

Instructions

1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 2011 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).

 
 

Answers

Alpha Geek
(8)
Status NEW Posted 15 May 2017 11:05 AM My Price 8.00

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file 1494848329-Answer.docx preview (468 words )
P-----------R 1-----------7-1-----------B H-----------ori-----------zon-----------tal----------- an-----------aly-----------sis----------- fo-----------r i-----------nco-----------me -----------sta-----------tem-----------ent----------- F-----------or -----------201-----------2, -----------McF-----------add-----------en -----------Inc-----------. r-----------epo-----------rte-----------d i-----------ts -----------mos-----------t s-----------ign-----------ifi-----------can-----------t i-----------ncr-----------eas-----------e i-----------n n-----------et -----------inc-----------ome----------- in----------- ye-----------ars-----------. A-----------t t-----------he -----------end----------- of----------- th-----------e y-----------ear-----------, J-----------ohn----------- Ma-----------yer-----------, t-----------he -----------pre-----------sid-----------ent-----------, i-----------s p-----------res-----------ent-----------ed -----------wit-----------h t-----------he -----------fol-----------low-----------ing----------- co-----------nde-----------nse-----------d c-----------omp-----------ara-----------tiv-----------e i-----------nco-----------me -----------sta-----------tem-----------ent-----------: -----------McF-----------add-----------en -----------Inc-----------. C-----------omp-----------ara-----------tiv-----------e I-----------nco-----------me -----------Sta-----------tem-----------ent----------- Fo-----------r t-----------he -----------Yea-----------rs -----------End-----------ed -----------Dec-----------emb-----------er -----------31,----------- 20-----------12 -----------and----------- 20-----------11 -----------201-----------2 2-----------011----------- S-----------ale-----------s $-----------516-----------,60-----------0 $-----------410-----------,00-----------0 -----------Sal-----------es -----------ret-----------urn-----------s a-----------nd -----------all-----------owa-----------nce-----------s 1-----------2,2-----------00 -----------10,-----------000-----------
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