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For 20Y2, Macklin Inc. reported a significant increase 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 $910,000 $700,000
Cost of goods sold 441,000 350,000
Gross profit $469,000 $350,000
Selling expenses $139,150 $115,000
Administrative expenses 99,450 85,000
Total operating expenses $238,600 $200,000
Income from operations $230,400 $150,000
Other income 65,000 50,000
Income before income tax $295,400 $200,000
Income tax expense 65,000 50,000
Net income $230,400 $150,000
Required:
Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y1 as the base year.

Sagot :

Answer: Check attachment

Explanation:

From the comparative income statement, we can see that the net income for 20Y2 is $230,400 while that of 20Y1 is $150,000.

We can deduce that the net Income has increased from 20Y1 to 20Y2. Also, the net sales have also increased. Kindly check the attachment for the comparative income statement prepared.

View image topeadeniran2
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