Common-Sized Income Statement Revenue and expense data for the current calendar

Question

Common-Sized Income Statement Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. Tannenhill's data are expressed in dollars. The electronics industry averages are expressed in percentages Electronics Industry Average 100 % 71 Tannenhill Company Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Operating income Other income $1,140,000 775,200 $364,800 $216,600 79,800 $296,400 $68,400 22,800 $91,200 11,400 $79,800 34,200 $45,600 29 % 16% 23 % 6% 8% Other expense Income before income tax Income tax expense Net income a. Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. If required, round percentages to one decimal place. Enter all amounts as positive numbers 4%

Explanation / Answer

TANNER HILL COMPANY

COMMON SIZED INCOME STATEMENT

FOR THE YEAR ENDED DECEMBER 31

NOTE : WE HAVE CACULATED THE PERCENTAGES TAKING SALES AS BASE FOR TANNERHILL COMPANY FOR THE YEAR ENDED DECEMBER 31

FOR EXAMPLE: FOR OTHER EXPENSE CALCULATION (IN %) = 11400*100/1140000

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TANNER HILL COMAPNY AMOUNT TANNER HILL COMPANY PERCENT ELECTRONICS INDUSTRY AVERAGE SALES $1140000 100 100% COST OF GOODS SOLD 775200 68 71% GROSS PROFIT $364800 32 29% SELLING EXPENSES $216600 19 16% ADMINISTRATIVE EXPENSES 79800 7 7% TOTAL OPERATING EXPENSES $296400 26 23% OPERATING INCOME $68400 6 6% OTHER INCOME 22800 2 2% $91200 8 8% OTHER EXPENSES 11400 1 1% INCOME BEFORE INCOME TAX EXPENSE $79800 7 7% INCOME TAX EXPENSE 34200 3 3% NET INCOME $45600 4 4%

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