Exercise 17-4 (Algo) Computing and interpreting common-size percents LO P2 Express the following comparative income statements in common-size percents. Using the common-size percents, which item is most responsible for the decline in net income? Complete this question by entering your answers in the tabs below. Income Statement Reason for Decline in Net Income Express the following comparative income statements in common-size percents. (Round your percentage answers to 1 decimal place.) Sales Cost of goods sold Gross profit Operating expenses Net income GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Year $ Current Year % 780,000 $ 560,000 220,000 130,400 89,600 $ Income Statement Prior Year $ $ $ 660,000 295,400 364,600 251,600 113,000 Prior Year % Reason for Decline in Net Income >

Set out below are the financial statements for KLEE Inc. Limited: Profit and Loss Accounts ($) 2015 (S000's) 2016 (5000's) Sales 285 200 Profit before interest and tax 92 84 Interest 10 10 Profit on ordinary activities before taxation 82 74 Тахабоn 32 29 50 Profit on ordinary activities after taxation Dividends Retained profit 15 15 35 30 Balance Sheets ($) Fixed Assets Fixed Assets 24 58 Current Assets Stock 25 20 Debtors Cash 21 20 3 49 48 Current Liabilities Trade Creditors 18 18 Тахafon payable Proposed dividend 11 8 15 15 42 41 Net Current Assets 7 5 31 61 Creditors: Amounts falling due after more than one year 10% Debentures 10 10 Total Net Assets 21 51 Shareholders' Funds Share Capital Profit and loss account 5 5 18 48 21 51

For each ratio listed, identify whether the change in ratio value from the prior year to the current year is favorable or unfavorable.