A comparative income statement is given below for McKenzie Sales, Limited, of Toronto: McKenzie Sales, Limited...

Transcribed Image Text:

A comparative income statement is given below for McKenzie Sales, Limited, of Toronto: McKenzie Sales, Limited Comparative Income Statement This Year Last Year Sales $ 7,350,000 $ 5,586,000 Cost of goods sold Gross margin 4,700,000 3,508,000 2,650,000 2,078,000 Selling and administrative expenses: Selling expenses Administrative expenses Total expenses Net operating income Interest expense 1,380,000 1,081,500 707,500 608,500 2,087,500 1,690,000 562,500 388,000 104,000 86,000 Net income before taxes $ 458,500 $ 302,000 Members of the company's board of directors are surprised to see that net income increased by only $156,500 when sales increased by $1,764,000. 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 Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total selling and administrative expenses Net operating income Interest expense Net income before taxes This Year Last Year di di di % % % % % % % % % % % do do do do do do % % % % % di di di di di di A comparative income statement is given below for McKenzie Sales, Limited, of Toronto: McKenzie Sales, Limited Comparative Income Statement This Year Last Year Sales $ 7,350,000 $ 5,586,000 Cost of goods sold Gross margin 4,700,000 3,508,000 2,650,000 2,078,000 Selling and administrative expenses: Selling expenses Administrative expenses Total expenses Net operating income Interest expense 1,380,000 1,081,500 707,500 608,500 2,087,500 1,690,000 562,500 388,000 104,000 86,000 Net income before taxes $ 458,500 $ 302,000 Members of the company's board of directors are surprised to see that net income increased by only $156,500 when sales increased by $1,764,000. 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 Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total selling and administrative expenses Net operating income Interest expense Net income before taxes This Year Last Year di di di % % % % % % % % % % % do do do do do do % % % % % di di di di di di