9 The following income statements were drawn from the annual reports of Harper S

Question

9 The following income statements were drawn from the annual reports of Harper Sales Company 2014 2015 200,000 $ 250,000 (140,000) (170,000 Net sales Cost of goods sold 60,000 80,000 Gross margin Less: Operating expense Selling and administrative expenses (28,000) (32,000 Net Income S 32,000 S 48,000 All dollar amounts are reported in thousands The president's message in the company's annual report stated that the company had implemented a strategy to increase market share by spending more on advertising. The president indicated that prices held steady and sales grew as expected. Prepare common size income statements for 2014 and 2015. (Round all intermediate calculations and final answers for percentage values to 1 decimal place.) HARPER SALES COMPANY Income Statement For the Years Ended December 31, 2014 and 2015 2014 2015

Explanation / Answer

HARPER SALES COMPANY INCOME STATEMENT For the year ended 2014 and 2015 Particulars 2014 % 2015 % Net Sales     200,000.00 100.00%     250,000.00 100.00% Less: Cost of goods sold (140,000.00) 70.00% (170,000.00) -85.00% Gross Profit        60,000.00 30.00%        80,000.00 40.00% Less: operating expenses 0.00% Selling and admin expenses     (28,000.00) 14.00%     (32,000.00) -16.00% Net Income        32,000.00 16.00%        48,000.00 24.00%

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