McKenzie Sales, Limited Comparative Income Statement Last Year $ 5,548,000 Sales This Year $ 7,300,000 4,610,000 2,690,000 Cost of goods sold 3,510,500 Gross margin 2,037,500 Selling and administrative expenses: Selling expenses 1,397,000 1,072,500 Administrative expenses 706,000 608,000 Total expenses 2,103,000 1,680,500 Net operating income. 587,000 104,000 357,000 89,000 Interest expense Net income before taxes $ 483,000 $ 268,000 Members of the company's board of directors are surprised to see that net income increased by only $215,000 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 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 100.0% % 100.0 % % d % 0.0 % 100.0 % % 100.0 % 100.0 % % 100.0 % % % 0.0 % 100.0 % % 100.0 %
McKenzie Sales, Limited Comparative Income Statement Last Year $ 5,548,000 Sales This Year $ 7,300,000 4,610,000 2,690,000 Cost of goods sold 3,510,500 Gross margin 2,037,500 Selling and administrative expenses: Selling expenses 1,397,000 1,072,500 Administrative expenses 706,000 608,000 Total expenses 2,103,000 1,680,500 Net operating income. 587,000 104,000 357,000 89,000 Interest expense Net income before taxes $ 483,000 $ 268,000 Members of the company's board of directors are surprised to see that net income increased by only $215,000 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 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 100.0% % 100.0 % % d % 0.0 % 100.0 % % 100.0 % 100.0 % % 100.0 % % % 0.0 % 100.0 % % 100.0 %
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter2: Financial Statements And The Annual Report
Section: Chapter Questions
Problem 2.13MCE
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