3.00 points Exercise 15-1 Common-Size Income Statement [LO15-1 A comparative inc

Question

3.00 points Exercise 15-1 Common-Size Income Statement [LO15-1 A comparative income statement is given below for McKenzie Sales, Ltd, of Toronto McKenzie Sales, Ltd Income Statenent This Year $7 380,000 4 690 000 Last Year $5 608,800 3,509.500 Sales Cost of goods sold Gross margin Seling and administrative expenses: 2,690,000 2,099,300 Selling expenses Administrative expenses 1,373,000 1077500 T06,500608,000 Total expenses 2,079 500 1,685,500 Net operating income 610,500413 800 84,000 nterest expense 101 000 Net income before taxes S 509.500 329 800 Members of the company s board of directors are surprised to see that net income increased by 5179.700 when sales increased by 51 721 200 Required: 1 Express each year's income statement in common-size percentages (Round your answers to 1 declimal place 0:2hould be entered as 123) Type here to search

Explanation / Answer

Answer

This Year

Last Year

Sales

$               7,380,000.00

100.0%

$         5,608,800.00

100.0%

Cost of Goods Sold

$               4,690,000.00

63.6%

$         3,509,500.00

62.6%

Gross Margin

$               2,690,000.00

36.4%

$         2,099,300.00

37.4%

Selling & Admin expenses:

Selling expenses

$               1,373,000.00

18.6%

$         1,077,500.00

19.2%

Administrative expenses

$                   706,500.00

9.6%

$             608,000.00

10.8%

Total Expenses

$               2,079,500.00

28.2%

$         1,685,500.00

30.1%

Net Operating Income

$                   610,500.00

8.3%

$             413,800.00

7.4%

Interest expense

$                   101,000.00

1.4%

$               84,000.00

1.5%

Net Income before taxes

$                   509,500.00

6.9%

$             329,800.00

5.9%

This Year

Last Year

Sales

$               7,380,000.00

100.0%

$         5,608,800.00

100.0%

Cost of Goods Sold

$               4,690,000.00

63.6%

$         3,509,500.00

62.6%

Gross Margin

$               2,690,000.00

36.4%

$         2,099,300.00

37.4%

Selling & Admin expenses:

Selling expenses

$               1,373,000.00

18.6%

$         1,077,500.00

19.2%

Administrative expenses

$                   706,500.00

9.6%

$             608,000.00

10.8%

Total Expenses

$               2,079,500.00

28.2%

$         1,685,500.00

30.1%

Net Operating Income

$                   610,500.00

8.3%

$             413,800.00

7.4%

Interest expense

$                   101,000.00

1.4%

$               84,000.00

1.5%

Net Income before taxes

$                   509,500.00

6.9%

$             329,800.00

5.9%

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