Comparative income statements for South Drive Company for Year 2 and Year 1 are given below. 1.
Question:
1. Prepare a common-size income statement for Year 1 and Year 2.
2. Return on sales for South Drive is lower in Year 2 than in Year 1. What expense is causing this lower profitability?
Transcribed Image Text:
Year 2 Year 1 Sales Cost of goods sold $900,000 500,000 432,000 240000) $468,000 260,000 (54,000)(30,000) on a....-.-.-__...-.._.- 90000 (50000) 324,000 180,000 」30000 $244000 150000 Operating income. 」80,000 Nct inkonC...-..
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1 Year 2 Year 1 Amount Percent Amount Percent Sales 900000 ...View the full answer
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