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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 | 4,750,000 | 3,506,500 | ||||
Gross margin | 2,570,000 | 2,056,700 | ||||
Selling and administrative expenses: | ||||||
Selling expenses | 1,370,000 | 1,076,000 | ||||
Administrative expenses | 708,000 | 616,000 | ||||
Total expenses | 2,078,000 | 1,692,000 | ||||
Net operating income | 492,000 | 364,700 | ||||
Interest expense | 104,000 | 89,000 | ||||
Net income before taxes | $ | 388,000 | $ | 275,700 | ||
Members of the companys board of directors are surprised to see that net income increased by only $112,300 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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