Question

Net income was 418,600 in the current year and 364,000 in the prior year. The year-to-year percentage change in net income is closest to:

1) 5.0%
2) 10.0%
3) 15.0%
4) 20.0%

Answer 1

The year-to-year percentage change in net income is closest to 15.0%.

To calculate the year-to-year percentage change in net income, you can use the formula: Percentage change = [(Change in net income) / (Prior year net income)] * 100. In this case, the change in net income is $418,600 - $364,000 = $54,600. The prior year net income is $364,000. Plugging these values into the formula, you get [(54,600) / (364,000)] * 100 = 15.0%. Therefore, the year-to-year percentage change in net income is closest to 15.0%, which corresponds to option 3.