Exercise 23.5 Rate of return on sales. LO 23-1

CANNA, Inc. Comparative Income Statement Years Ended December 31, 2019 and 2018
	Amounts
	2019		2018
Sales	1,635,750		1,500,950
Less: Sales returns and allowances	96,750		82,950
Net sales	1,539,000		1,418,000
Cost of goods sold	1,066,300		992,600
Gross profit on sales	472,700		425,400
Selling expenses	215,000		205,000
General expenses	210,000		190,000
Total expenses	425,000		395,000
Net income before income taxes	47,700		30,400
Income tax expense	7,155		4,560
Net income after income taxes	40,545		25,840

Calculate the rate of net income on sales for 2019 and 2018.

Net Income on Sales
	Choose Numerator		Choose Denominator
				=	Rate of Return
2019					0	%
2018					0	%