evenue and expense data for the current calendar year for Jaribo Communications
ID: 2435845 • Letter: E
Question
evenue and expense data for the current calendar year for Jaribo Communications Company and for the communications industry are as follows. The Jaribo Communications Company data are expressed in dollars. The communications industry averages are expressed in percentages.
Prepare a common-size income statement comparing the results of operations for Jaribo Communications Company with the industry average. Round to one digit after the decimal place.
Sales // // // 101.0 Sales Returns & Allowances // // // 1.0 SelectGross profitNet salesNet incomeOperating incomeIncome before income tax // // // // // // // // // // Cost of Goods Sold // // // SelectGross profitNet salesNet incomeOperating incomeIncome before income tax // // // // // // // // // // Selling Expenses Administrative Expenses 143,7 50 SelectGross profitOperating incomeNet incomeTotal operating expensesNet sales // // // // // // // // // SelectGross profitOperating incomeNet incomeTotal expensesNet sales // // // // // // // // // // Other Income 22,500 1.2 153,750 // // Other Expense 18,750 // // // 1.7 SelectIncome before income taxGross profitOperating incomeNet salesNet income // // // // // // // // Income Tax Expense 50,000 // // // SelectIncome before income taxOperating incomeNet salesGross profitNet income // // // // // // // //Explanation / Answer
Jaribo Communications Communications Communications Industry Average Industry Average (in percentage) (in figures ) Sales 1,265,000.00 101.00% 1,277,650.00 Sales Returns and Allowances 15,000.00 1% 12,776.50 Net Sales 1,250,000.00 100% 1,264,873.50 Cost of Goods Sold 450,000.00 41% 518,598.14 Gross Profit 800,000.00 59% 746,275.37 Less: Selling Expenses 525,000.00 38% 480,651.93 Administrative Expense 143,750.00 10.50% 132,811.72 Other Income 22,500.00 1.20% 15,178.48 Other Expenses 18,750.00 1.70% 21,502.85 Net Income 90,000.00 96,130.39 Income Tax Expense 50,000.00 4% 50,594.94 Net Income 40,000.00 45,535.45
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