A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: McKenzie Sales, Ltd. Comparative
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Question:
A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto:
McKenzie Sales, Ltd. Comparative Income Statement | ||||||
This Year | Last Year | |||||
Sales | $ | 7,300,000 | $ | 5,548,000 | ||
Cost of goods sold | 4,670,000 | 3,513,000 | ||||
Gross margin | 2,630,000 | 2,035,000 | ||||
Selling and administrative expenses: | ||||||
Selling expenses | 1,379,000 | 1,077,500 | ||||
Administrative expenses | 704,000 | 616,000 | ||||
Total expenses | 2,083,000 | 1,693,500 | ||||
Net operating income | 547,000 | 341,500 | ||||
Interest expense | 104,000 | 85,000 | ||||
Net income before taxes | $ | 443,000 | $ | 256,500 | ||
Members of the company’s board of directors are surprised to see that net income increased by only $186,500 when sales increased by $1,752,000.
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).)
Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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