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Exercise 13-1 Common-Size Income Statement [LO13-1] A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: McKenzie Sales, Ltd. Comparative Income Statement
Exercise 13-1 Common-Size Income Statement [LO13-1]
A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: |
McKenzie Sales, Ltd. Comparative Income Statement | ||||||
This Year | Last Year | |||||
Sales | $ | 7,300,000 | $ | 5,548,000 | ||
Cost of goods sold | 4,650,000 | 3,510,500 | ||||
Gross margin | 2,650,000 | 2,037,500 | ||||
Selling and administrative expenses: | ||||||
Selling expenses | 1,386,000 | 1,074,000 | ||||
Administrative expenses | 705,000 | 608,500 | ||||
Total expenses | 2,091,000 | 1,682,500 | ||||
Net operating income | 559,000 | 355,000 | ||||
Interest expense | 98,000 | 91,000 | ||||
Net income before taxes | $ | 461,000 | $ | 264,000 | ||
Members of the companys board of directors are surprised to see that net income increased by only $197,000 when sales increased by $1,752,000. |
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).) |
This year | Last year | |
Sales | ||
Gross Margin | ||
Selling and administrative expenses: | ||
Selling expenses | ||
administrative expenses | ||
total selling and administrative expenses | ||
net operating income | ||
interest income | ||
net income before taxes | ||
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