Exercise 17-3 (Algorithmic) Common-Sized Income Statement

Revenue and expense data for the current calendar year for Sorenson Electronics Company and for the electronics industry are as follows. The Sorenson Electronics Company data are expressed in dollars. The electronics industry averages are expressed in percentages.

	Sorenson Electronics Company			Electronics Industry Average
Sales	$1,379,700			102.2	%
Sales returns and allowances	29,700			2.2
Net sales	$1,350,000			100	%
Cost of goods sold	783,000			63
Gross profit	$567,000			37	%
Selling expenses	$351,000			22	%
Administrative expenses	135,000			9
Total operating expenses	$486,000			31	%
Operating income	$81,000			6	%
Other income	27,000			2
	$108,000			8	%
Other expense	13,500			1
Income before income tax	$94,500			7	%
Income tax	40,500			4
Net income	$54,000			3	%