E17-16 Preparing common-size income statements (PLEASE EXPLAIN STEP BY STEP ON HOW TO GET THESE PERCENTAGES AND CALCULATIONS)

Data for Mulberry Designs, Inc. follow:

Refer to the data presented for Mulberry Designs, Inc.

Requirements

1. Prepare a comparative common-size income statement for Mulberry Designs, Inc. using the 2018 and 2017 data. Round percentages to one-tenth percent (three decimal places). (PLEASE EXPLAIN STEP BY STEP ON HOW TO GET THESE PERCENTAGES AND CALCULATIONS)

2. To an investor, how does 2018 compare with 2017? Explain your reasoning.

MULBERRY DESIGNS, INC. Comparative Income Statement Years Ended December 31, 2018 and 2017 2017 2018 $ 431,000 $372,350 Net Sales Revenue Expenses: Cost of Goods Sold Selling and Administrative Expenses Other Expenses Total Expenses Net Income 203,850 99,000 9,000 311,850 $ 119,150 186,000 93,250 4,650 283,900 $ 88,450