1. Question Content Area

   Common-Sized Income Statement

   Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. Tannenhill's data are expressed in dollars. The electronics industry averages are expressed in percentages.

   	Tannenhill Company			Electronics Industry Average
   Sales	$4,000,000			100.0	%
   Cost of goods sold	(2,120,000)			(60.0)
   Gross profit	$1,880,000			40.0	%
   Selling expenses	$(1,080,000)			(24.0)	%
   Administrative expenses	(640,000)			(14.0)
   Total operating expenses	$(1,720,000)			(38.0)	%
   Operating income	$160,000			2.0	%
   Other revenue and expense:
   Other revenue	120,000			3.0
   Other expense	(80,000)			(2.0)
   Income before income tax expense	$200,000			3.0	%
   Income tax expense	(80,000)			(2.0)
   Net income	$120,000			1.0	%

   Question Content Area

   a. Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average.

   Tannenhill Company Common-Sized Income Statement For the Year Ended December 31

   	Tannenhill Company Amount	Tannenhill Company Percent	Electronics Industry Average
   Sales	$4,000,000	fill in the blank 1117a6fe207ffc4_1%	100%
   Cost of goods sold	(2,120,000)	fill in the blank 1117a6fe207ffc4_2	(60)
   Gross profit	$1,880,000	fill in the blank 1117a6fe207ffc4_3%	40%
   Selling expenses	$(1,080,000)	fill in the blank 1117a6fe207ffc4_4%	(24)%
   Administrative expenses	(640,000)	fill in the blank 1117a6fe207ffc4_5	(14)
   Total operating expenses	$(1,720,000)	fill in the blank 1117a6fe207ffc4_6%	(38)%
   Operating income	$160,000	fill in the blank 1117a6fe207ffc4_7%	2%
   Other revenue and expense:
   Other revenue	120,000	fill in the blank 1117a6fe207ffc4_8	3
   Other expense	(80,000)	fill in the blank 1117a6fe207ffc4_9	(2)
   Income before income tax expense	$200,000	fill in the blank 1117a6fe207ffc4_10%	3%
   Income tax expense	(80,000)	fill in the blank 1117a6fe207ffc4_11	(2)
   Net income	$120,000	fill in the blank 1117a6fe207ffc4_12	1

   Question Content Area