GARRITY ELECTRONICS COMPANY Common-Size Income Statement Electronics Garrity Ind
ID: 2496810 • Letter: G
Question
GARRITY ELECTRONICS COMPANY
Common-Size Income Statement
Electronics
Garrity
Industry
Electronics Company
Average
Amount
Percent
Sales
$ 4,728,800
102.5%
Sales returns and allowances
128,800
2.5%
Net sales
$ 4,600,000
100.0%
100.0%
Cost of goods sold
2,668,000
61.0%
Gross profit
$ 1,932,000
39.0%
Selling expenses
$ 1,472,000
23.0%
Administrative expenses
368,000
10.0%
Total operating expenses
$ 1,840,000
33.0%
Operating income
$ 92,000
6.0%
Other income
138,000
3.0%
$ 230,000
9.0%
Other expense
46,000
1.0%
Income before income tax
$ 184,000
8.0%
Income tax expense
115,000
2.5%
Net income
$ 69,000
1.5%
5.5%
Garrity Electronics Company Electronics Industry Average Sales $4,728,800 102.5% Sales returns and allowances 128,800 2.5 Net sales $4,600,000 100.0% Cost of goods sold 2,668,000 61.0 Gross profit $1,932,000 39.0% Selling expenses $1,472,000 23.0% Administrative expenses 368,000 10.0 Total operating expenses $1,840,000 33.0% Operating income $ 92,000 6.0% Other income 138,000 3.0 $ 230,000 9.0% Other expense 46,000 1.0 Income before income tax $ 184,000 8.0% Income tax expense 115,000 2.5 Net income $ 69,000 5.5% a. Prepare a common-sized income statement comparing the results of operations for Garrity Electronics Company with the industry average. b. As far as the data permit, comment on significant relationships revealed by the comparisons.
GARRITY ELECTRONICS COMPANY
Common-Size Income Statement
Electronics
Garrity
Industry
Electronics Company
Average
Amount
Percent
Sales
$ 4,728,800
102.5%
Sales returns and allowances
128,800
2.5%
Net sales
$ 4,600,000
100.0%
100.0%
Cost of goods sold
2,668,000
61.0%
Gross profit
$ 1,932,000
39.0%
Selling expenses
$ 1,472,000
23.0%
Administrative expenses
368,000
10.0%
Total operating expenses
$ 1,840,000
33.0%
Operating income
$ 92,000
6.0%
Other income
138,000
3.0%
$ 230,000
9.0%
Other expense
46,000
1.0%
Income before income tax
$ 184,000
8.0%
Income tax expense
115,000
2.5%
Net income
$ 69,000
1.5%
5.5%
Explanation / Answer
GARRITY ELECTRONICS COMPANY Common-Size Income Statement Electronics Garrity Ind
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