Question

Calculator Print Item Show Me How eBook For 20Y2, McDade Company reported a dedine in net income. At the end of the year, T. Burrows, the president, is presented with the following condensed comparative income statement: McDade Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Υ1 Sales $706,976 $617,000 Cost of goods sold 390,000 507,000 Gross profit $199,976 $227,000 Selling expenses $71,500 $52,000 Administrative expenses 41,910 33,000 Total operating expenses $113.410 $85,000 Income from operations $86,566 $142,000 Other income 3,193 2,600 Income before income tax $89,759 $144,600 Income tax expense 25,100 43,400 Net income $64,659 $101,200 Required:

Answer 1

	20Y2	20Y1	Difference - Amount	Difference - Percent
Sales	706976	617000	89976	14.6%
Cost of goods sold	507000	390000	117000	30.0%
Gross profit	199976	227000	-27024	-11.9%
Selling expenses	71500	52000	19500	37.5%
Administrative expenses	41910	33000	8910	27.0%
Total operating expenses	113410	85000	28410	33.4%
Income from operations	86566	142000	-55434	-39.0%
Other income	3193	2600	593	22.8%
Income before income tax	89759	144600	-54841	-37.9%
Income tax expense	25100	43400	-18300	-42.2%
Net income	64659	101200	-36541	-36.1%