of For 20Y2, McDade Company reported a dedine in net income. At the end of the y

Question

of 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 McDade Company Comparative Income Statement 20Y2 20Y1 Sales Cost of goods sold Gross profit $16,800,000 $15,000,000 11,500,000 10,000,000 $5,300,000$5,000,000 $1,770,000$1,500,000 1,000,000 $2,500,000 s2,310,000 $2,500,000 256,950225,000 $2,566,950 $2,725,000 1,500,000 $1,153,950 $1,225,000 1,220,000 Administrative expenses Total operating expenses Income from operations Other revenue Income before income tax Income tax expense Net income Required S2·990,000 1,413,000 Next

Explanation / Answer

2012 2011 Increasse/(Decrease) % Increase/(decrease) Sales 16800000 15000000 1800000 12.00% Cost of sales 11500000 10,000,000 1500000 15.00% Gross profit 5300000 5000000 300000 6.00% Selling expense 1770000 1500000 270000 18.00% Admin expense 1220000 1000000 220000 22.00% Tota operating expense 2990000 2500000 490000 19.60% Income from operations 2310000 2500000 -190000 -7.60% Other revenues 256950 225000 31950 14.20% Income before tax 2566950 2725000 -158050 -5.80% Income tax expense 1,413,000 1500000 -87000 -5.80% Net income 1153950 1,225,000 -71050 -5.80% Net income has decreased from 2011 to 2012. Sales have increased by 12%; however, cost of goods sold has increased by 15%. Causing the gross profit to increases by just 6%

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.