Question 1:

Question 2:

Rotorua Products, Ltd., of New Zealand markets agricultural products for the burgeoning Asian consumer market. The company's current assets, current liabilities, and sales over the last five years (Year 5 is the most recent year) are as follows: Year 1 $4,530,810 Year 2 $4,875,500 Year 3 $5,014, 330 Year 4 $5,558, 280 Year 5 $5,660,110 Sales Cash Accounts receivable, net Inventory Total current assets $ 91,668 402,417 812,241 $1,306,326 $ 302,821 $ 95,555 420,563 873,697 $1,389,815 $ 346,867 $ 96,913 445,622 825,499 $1,368,034 $ 333,548 $ 75,072 506,515 887,936 $1,469,523 $ 336,219 $ 75,734 566,080 914,547 $1,556,361 $ 391,378 Current liabilities Required: 1. Express all of the asset, liability, and sales data in trend percentages. Use Year 1 as the base year. (Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) Year 1 Year 2 Year 3 Year 4 Year 5 Sales Current assets: Cash Accounts receivable Inventory Total current assets Current liabilities Last Year $5,616,400 3,511,000 2,105, 400 McKenzie Sales, Ltd. Comparative Income Statement This Year Sales $7,390,000 Cost of goods sold 4,700,000 Gross margin 2,690,000 Selling and administrative expenses: Selling expenses 1,389,000 Administrative expenses 707,000 Total expenses 2,096,000 Net operating income 594,000 Interest expense 97,000 Net income before taxes $ 497,000 1,081,000 608,000 1,689,000 416,400 93,000 $ 323,400 Members of the company's board of directors are surprised to see that net income increased by only $173,600 when sales increased by $1,773,600. 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 0.0 % 0.0 Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total selling and administrative expenses Net operating income Interest expense Net income before taxes 0.0 % 0.0% 0.0%