Revenue and expense data for the current calendar year for Sorenson Electronics Company and for the electronics industry are as follows. Sorenson Electronics Company data are expressed in dollars. The electronics industry averages are expressed in percentages. SorensonElectronicsCompany ElectronicsIndustryAverageSales$2,690,000 100%Cost of goods sold(1,829,200) (74) Gross profit$860,800 26%Selling expenses$(484,200) (10)%Administrative expenses(188,300) (10) Total operating expenses$(672,500) (20)%Operating income$188,300 6%Other revenue and expense: Other revenue53,800 4 Other expense(26,900) (3) Income before income tax$215,200 7%Income tax expense(80,700) (5) Net income$134,500 2% a. Prepare a common-sized income statement comparing the results of operations for Sorenson Electronics Company with the industry average. If required, round percentages to onedecimal place.Sorenson Electronics CompanyCommon-Sized Income StatementSorenson Electronics Sorenson Electronics Electronics IndustryCompany AmountCompany PercentAverageSales$2,690,000%100%Cost of Goods Sold(1,829,200)(74)%Gross profit$860,80026%Selling Expenses$(484,200)%(10)%Administrative Expenses(188,300)%(10)%Total operating expenses$(672,500)%(20)%Operating income$188,300%6%Other revenue and expenseOther revenue53,800%4%Other expense(26,900)%(3)%Income before income tax$215,2007%Income tax expense(80,700)(5)%Net income$134,500%2%

COMMON SIZE INCOME STATEMENT IS STATEMENT IN WHICH EVERY LINE ITEM IN INCOME STATEMENT IS EXPRESSED…

Answered: Revenue and expense data for the…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 1MAD

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

	Sorenson Electronics Company	Electronics Industry Average
Sales	$2,690,000		100	%
Cost of goods sold	(1,829,200)		(74)
Gross profit	$860,800		26	%
Selling expenses	$(484,200)		(10)	%
Administrative expenses	(188,300)		(10)
Total operating expenses	$(672,500)		(20)	%
Operating income	$188,300		6	%
Other revenue and expense:
Other revenue	53,800		4
Other expense	(26,900)		(3)
Income before income tax	$215,200		7	%
Income tax expense	(80,700)		(5)
Net income	$134,500		2	%

a. Prepare a common-sized income statement comparing the results of operations for Sorenson Electronics Company with the industry average. If required, round percentages to one
decimal place.
Sorenson Electronics Company
Common-Sized Income Statement
Sorenson Electronics Sorenson Electronics Electronics Industry
Company Amount
Company Percent
Average
Sales
$2,690,000
%
100%
Cost of Goods Sold
(1,829,200)
(74)%
Gross profit
$860,800
26%
Selling Expenses
$(484,200)
%
(10)%
Administrative Expenses
(188,300)
%
(10)%
Total operating expenses
$(672,500)
%
(20)%
Operating income
$188,300
%
6%
Other revenue and expense
Other revenue
53,800
%
4%
Other expense
(26,900)
%
(3)%
Income before income tax
$215,200
7%
Income tax expense
(80,700)
(5)%
Net income
$134,500
%
2%

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