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

Answer:

The percentage change in net income = 33.33%

Explanation:

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

Generally when calculating percentage change, the formula used is:

$\frac{final - initial}{initial} * 100$

where:

final = income for 20X7 = $24,000

Initial = income for 20X6 = $18,000

∴ % change = $\frac{24,000-18000}{18000} *100$

$=\frac{6000}{18000} *100\\= 0.3333 * 100$

= 33.33%