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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 | $ | 7,350,000 | $ | 5,586,000 | ||
Cost of goods sold | 4,780,000 | 3,509,500 | ||||
Gross margin | 2,570,000 | 2,076,500 | ||||
Selling and administrative expenses: | ||||||
Selling expenses | 1,394,000 | 1,076,000 | ||||
Administrative expenses | 706,000 | 611,500 | ||||
Total expenses | 2,100,000 | 1,687,500 | ||||
Net operating income | 470,000 | 389,000 | ||||
Interest expense | 100,000 | 89,000 | ||||
Net income before taxes | $ | 370,000 | $ | 300,000 | ||
Members of the companys board of directors are surprised to see that net income increased by only $70,000 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).) |
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