A comparative income statement is given below for McKenzie Sales, Limited, of Toronto: McKenzie Sales, Limited...
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A comparative income statement is given below for McKenzie Sales, Limited, of Toronto: McKenzie Sales, Limited Comparative Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total expenses Net operating income. Interest expense Net income before taxes This Year $ 7,340,000 4,790,000 2,550,000 1,371,000 711,500 2,082,500 467,500 98,000 $369,500 Last Year $ 5,578,400 3,510,000 2,068,400 1,073,500 609,500 1,683,000 385,400 93,000 $ 292,400 Members of the company's board of directors are surprised to see that net income increased by only $77,100 when sales increased by $1,761,600. 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 % 0.0% % % 0.0 % 0.0 % % 0.0% Last Year % 0.0 % % % 0.0% 0.0 % % 0.0 % A comparative income statement is given below for McKenzie Sales, Limited, of Toronto: McKenzie Sales, Limited Comparative Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total expenses Net operating income. Interest expense Net income before taxes This Year $ 7,340,000 4,790,000 2,550,000 1,371,000 711,500 2,082,500 467,500 98,000 $369,500 Last Year $ 5,578,400 3,510,000 2,068,400 1,073,500 609,500 1,683,000 385,400 93,000 $ 292,400 Members of the company's board of directors are surprised to see that net income increased by only $77,100 when sales increased by $1,761,600. 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 % 0.0% % % 0.0 % 0.0 % % 0.0% Last Year % 0.0 % % % 0.0% 0.0 % % 0.0 %
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To calculate the commonsize percentages for each item on the income statement you need to divide each item by the total sales for the respective year ... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Posted Date:
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