Common-size and trend percents for Rustynail Company\'s sales, cost of goods sol

Question

Common-size and trend percents for Rustynail Company's sales, cost of goods sold, and expenses follow Common-Size Percents 2014 Trend Percents 2014 2013 2012 103.9% 2013 2012 Sales Cost of goods sold Total expenses 100.0% 57.3 14.2 100.0% 100.0% 105.1% 116.7111.3 100.0 106.7101.7 100.0 100.0% 63.6 14.4 61.4 13.9 Determine the net income for the following years. (Enter all amounts as positive values.) 2014 2013 2012 Sales Cost of Goods Sold Total Expenses Net Income $ 100,000 57,300 14,200 28,500 Did the net income increase, decrease, or remain unchanged in this three-year period? Net income increased Remained unchanged Net income decreased

Explanation / Answer

SOLUTION

2013-

Sales = 100,000 * 103.9% = $103,900

Cost of goods sold = 57,300 *111.3% = $63,775

Total Expenses = 14,200 * 101.7% = $14,441

2014-

Sales = 100,000 * 105.1% = $105,100

Cost of goods sold = 57,300 *116.7% = $66,869

Total Expenses = 14,200 * 106.7%% = $15,151

- Net income decreased during three years period

2014 ($) 2013 ($) 2012 ($) Sales 105,100 103,900 100,000 Cost of goods sold 66,869 63,775 57,300 Total Expenses 15,151 14,441 14,200 Net Income 23,080 25,684 28,500

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