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Category > Accounting Posted 18 Dec 2017 My Price 10.00

comparative income statement

A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto:
McKenzie Sales, Ltd.
Comparative Income Statement
  This Year    Last Year   
  Sales $ 8,000,000   $ 6,000,000  
  Cost of goods sold   4,984,000     3,516,000  
 
  Gross margin   3,016,000     2,484,000  
 
  Selling and administrative expenses:            
      Selling expenses   1,480,000     1,092,000  
      Administrative expenses   712,000     618,000  
 
  Total expenses   2,192,000     1,710,000  
 
  Net operating income   824,000     774,000  
  Interest expense   96,000     84,000  
 
  Net income before taxes $  728,000   $ 690,000  
 

     Members of the company’s board of directors are surprised to see that net income increased by only $38,000 when sales increased by two million dollars.
Required:
1.

Express each year's income statement in common-size percentages. (Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)


Sales 100.0 % 100.0 %Cost of goods sold 62.3 % 58.6 %Gross margin 37.7 % 41.4 %Selling and administrative expenses: Selling expenses % %Administrative expenses 8.4 % 9.7 %Total selling and administrative expenses 8.4 % 9.7 %Net operating income 29.3 % 31.7 %Interest expense 1.2 % 1.4 %Net income before taxes 28.1 % 30.3

%

Sales 100.0 % 100.0 % Cost of goods sold 62.3 % 58.6 % Gross margin 37.7 % 41.4 % Selling and administrative expenses: Selling expenses % % Administrative expenses 8.4 % 9.7 % Total selling and administrative expenses 8.4 % 9.7 % Net operating income 29.3 % 31.7 % Interest expense 1.2 % 1.4 % Net income before taxes 28.1 % 30.3 %

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CourseLover
(12)
Status NEW Posted 18 Dec 2017 08:12 AM My Price 10.00

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