Franklin Corporation reported the following operating results for two consecutiv

Question

Franklin Corporation reported the following operating results for two consecutive years: Required a. Compute the percentage changes in Franklin Corporation's income statement componen Round your answers to 1 decimal place. (i.e., .234 should be entered as 23.4).) NKLIN CORPORATION Income Statements 2018 Percentage Change 2017 3 $ 1,299,000 $ 1,004,000 602,400 Sales Cost of goods sold798,885 6 Gross margin Operating expenses Income before taxes Income taxes 500,115401600 195,000 206,600 61,60052,100 Net income (loss) $ 134515 154,500 304,000 196,115

Explanation / Answer

Solution :

FRANKLIN CORPORATION

Income Statements

Workings :

  

Absolute Change

( Amount of year 2018 minus Amount of year 2017)

% Change

(Absolute Change/ Amount of Year 2017)* 100

(2,95,000/1,004,000) x 100 =29.38 or say 29.4

( 98,515/401,600) x 100 = 24.53 or say 24.5

2018 2017 Percentage Change(%) Sales $ 1,299,000 $ 1,004,000   29.4 % Cost of goods sold   798,885   602,400   32.6 % Gross margin   500,115   401,600 24.5 % Operating expenses   304,000   195,000 55.9 % Income before taxes   196,115   206,600 - 5.1 % Income taxes 61,600   52,100 18.2 % Net Income (loss)   $ 134,515 $ 154,500 - 12.9 %

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