Question

A company reported $18,000.00 of net income for 20X6, $24,000.00 for 20X7, and $26,000.00 for 20X8. The percentage change in net income from 20X6 to 20X7 was A. 8.33 percent. B. 30.00 percent.

Answer 1

The percentage change in net income = 33.33%

Step-by-step explanation:

Let us establish a formula for calculating the percentage change in net income.

Generally when calculating percentage change, the formula used is:

`(final - initial)/(initial) * 100`

where:

final = income for 20X7 = $24,000

Initial = income for 20X6 = $18,000

∴ % change =
`(24,000-18000)/(18000) *100`

`=(6000)/(18000) *100\\= 0.3333 * 100`

= 33.33%