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A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: McKenzie Sales, Ltd. Comparative Income Statement This Year Last Year Sales $
A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto:
McKenzie Sales, Ltd. Comparative Income Statement | ||||||
This Year | Last Year | |||||
Sales | $ | 7,320,000 | $ | 5,563,200 | ||
Cost of goods sold | 4,710,000 | 3,510,000 | ||||
Gross margin | 2,610,000 | 2,053,200 | ||||
Selling and administrative expenses: | ||||||
Selling expenses | 1,385,000 | 1,076,500 | ||||
Administrative expenses | 709,500 | 610,000 | ||||
Total expenses | 2,094,500 | 1,686,500 | ||||
Net operating income | 515,500 | 366,700 | ||||
Interest expense | 97,000 | 93,000 | ||||
Net income before taxes | $ | 418,500 | $ | 273,700 | ||
Members of the companys board of directors are surprised to see that net income increased by only $144,800 when sales increased by $1,756,800.
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).)
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