Scherer Company provided the following income statements for its first 3 years of operation:

Scherer Company

Income Statements

Years of Operation

1		Year 1	Year 2	Year 3
2	Net sales	$1,000,000.00	$1,100,000.00	$1,300,000.00
3	Less: Cost of goods sold	(300,000.00)	(310,000.00)	(364,000.00)
4	Gross margin	$700,000.00	$790,000.00	$936,000.00
5	Less:
6	Operating expenses	(421,000.00)	(484,000.00)	(591,500.00)
7	Income taxes	(111,600.00)	(122,400.00)	(137,800.00)
8	Net income	$167,400.00	$183,600.00	$206,700.00

Required:

Prepare common-size income statements by using net sales as the base.

Scherer Company provided the following income statements for its first 3 years of operation:

Scherer Company

Income Statements

Years of Operation

1		Year 1	Year 2	Year 3
2	Net sales	$1,000,000.00	$1,100,000.00	$1,300,000.00
3	Less: Cost of goods sold	(300,000.00)	(310,000.00)	(364,000.00)
4	Gross margin	$700,000.00	$790,000.00	$936,000.00
5	Less:
6	Operating expenses	(421,000.00)	(484,000.00)	(591,500.00)
7	Income taxes	(111,600.00)	(122,400.00)	(137,800.00)
8	Net income	$167,400.00	$183,600.00	$206,700.00

	Required:
	Prepare common-size income statements by using net sales as the base.

Refer to the list below for the exact wording of an account title within your income statement.

Labels
Add
Less
Amount Descriptions
Add contribution margin
Cost of goods sold
Gross margin
Income taxes
Less contribution margin
Net income
Net loss
Net sales
Operating Expenses

Prepare common-size income statements by using net sales as the base. (Note: Enter all amounts as positive numbers, except for a net loss. Enter net loss as a negative number, if applicable. Round answers to the nearest whole percentage. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries.)

Scherer Company

Common-Size Income Statements

Years of Operation

1		Year 1	Year 1	Year 2	Year 2	Year 3	Year 3
2		Dollars	Percentage	Dollars	Percentage	Dollars	Percentage
3
4
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6
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