In: Accounting
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.
1 |
Tannenhill Company |
Electronics Industry Average |
|
2 |
Sales |
$4,920,000.00 |
100.0% |
3 |
Cost of goods sold |
2,533,800.00 |
56.5 |
4 |
Gross profit |
$2,386,200.00 |
43.5% |
5 |
Selling expenses |
$1,328,400.00 |
24.0% |
6 |
Administrative expenses |
787,200.00 |
14.0 |
7 |
Total operating expenses |
$2,115,600.00 |
38.0% |
8 |
Operating income |
$270,600.00 |
5.5% |
9 |
Other revenue |
120,000.00 |
2.4 |
10 |
$390,600.00 |
7.9% |
|
11 |
Other expense |
74,000.00 |
1.5 |
12 |
Income before income tax |
$316,600.00 |
6.4% |
13 |
Income tax expense |
80,000.00 |
1.6 |
14 |
Net income |
$236,600.00 |
4.8% |
A. | Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. Round percentages to one decimal place. Enter all amounts as positive numbers. |
B. | As far as the data permit, comment on significant relationships revealed by the comparisons. |
Income Statement
Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. Round percentages to one decimal place. Enter all amounts as positive numbers. Percentage sign will appear automatically.
Tannenhill Company |
Common-Sized Income Statement |
For the Year Ended December 31 |
1 |
Tannenhill Company |
Tannenhill Company |
Electronics Industry Average |
|
2 |
Amount |
Percent |
||
3 |
Sales |
$4,920,000.00 |
100.0% |
|
4 |
Cost of goods sold |
2,533,800.00 |
56.5 |
|
5 |
Gross profit |
$2,386,200.00 |
43.5% |
|
6 |
Selling expenses |
$1,328,400.00 |
24.0 |
|
7 |
Administrative expenses |
787,200.00 |
14.0 |
|
8 |
Total operating expenses |
$2,115,600.00 |
38.0% |
|
9 |
Income from operations |
$270,600.00 |
5.5% |
|
10 |
Other revenue |
120,000.00 |
2.4 |
|
11 |
$390,600.00 |
7.9% |
||
12 |
Other expense |
74,000.00 |
1.5 |
|
13 |
Income before income tax |
$316,600.00 |
6.4% |
|
14 |
Income tax expense |
80,000.00 |
1.6 |
|
15 |
Net income |
$236,600.00 |
4.8% |
Tannenhill Company |
Common-Sized Income Statement |
For the Year Ended December 31 |
1 |
Tannenhill Company |
Tannenhill Company |
Electronics Industry Average |
|
2 |
Amount |
Percent |
||
3 |
Sales |
$4,920,000.00 |
100% |
100.0% |
4 |
Cost of goods sold |
2,533,800.00 |
51.5% (2433800/4920000*100) |
56.5 |
5 |
Gross profit |
$2,386,200.00 |
48.5% (2386200/4920000*100) |
43.5% |
6 |
Selling expenses |
$1,328,400.00 |
27% (1328400/4920000*100) |
24.0 |
7 |
Administrative expenses |
787,200.00 |
16% (787200/4920000*100) |
14.0 |
8 |
Total operating expenses |
$2,115,600.00 |
43% (2115600/4920000*100) |
38.0% |
9 |
Income from operations |
$270,600.00 |
5.5% (270600/4920000*100) |
5.5% |
10 |
Other revenue |
120,000.00 |
2.44% (120000/4920000*100) |
2.4 |
11 |
$390,600.00 |
7.94% (390600/4920000*100) |
7.9% |
|
12 |
Other expense |
74,000.00 |
1.5% (74000/4920000*100) |
1.5 |
13 |
Income before income tax |
$316,600.00 |
6.44% (316600/4920000*100) |
6.4% |
14 |
Income tax expense |
80,000.00 |
1.63% (80000/4920,000*100) |
1.6 |
15 |
Net income |
$236,600.00 |
4.81% (236600/4920,000*100) |
4.8% |