value: 15.00 points Exercise 13-1 Common-Size Income Statement [LO13-1 A compara

ID: 2591930 • Letter: V

Question

value: 15.00 points Exercise 13-1 Common-Size Income Statement [LO13-1 A comparative income statement is given below for McKenzie Sales, Ltd, of Toronto McKenzie Sales, Ltd. Comparative Income Statement This Year Last Year $7,360,000 $5,593,600 4,670,000 3,514,500 Sales Cost of goods sold Gross margin Selling and administrative expenses: 2,690,000 2,079,100 1,397,000 1,078,500 709,000 613,500 Selling expenses Administrative expenses Total expenses Net operating income 2,106,000 1,692,000 584,000 98,000 387,100 87,000 Interest expense Net income before taxes S 486,000 300,100 Members of the company's board of directors are surprised to see that net income increased by only $185,900 when sales increased by $1,766,400 Required 1. Express each years income statement in common-size percentages. (Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) This Year Last Year Sales Cost of goods sold Gross margin Selling and administrative expenses 001% 001% Selling expenses Total selling and administrative expenses Net operating income Interest expense Net incorne before taxes 001% 001% 001% 001% 001% 001%

Explanation / Answer

(In $)

This Year

Last Year

Sales

100

Cost of Goods Sold

63.45

62.83

Gross Margin

36.55

37.17

Selling and Administrative expenses

Selling Expenses

18.98

19.28

Administrative expenses

9.63

10.97

Total Selling and administrative expenses

28.61

30.25

Net operating Income

7.93

6.92

Interest Expenses

1.33

1.56

Net Income Before taxes

6.6

5.36

Ratio = [Amount / Base (I.e. Sales)] * 100