Question
In: Accounting
A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: McKenzie Sales, Ltd....
A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto:
| McKenzie Sales, Ltd. Comparative Income Statement |
||||||
| This Year | Last Year | |||||
| Sales | $ | 7,400,000 | $ | 5,624,000 | ||
| Cost of goods sold | 4,610,000 | 3,509,500 | ||||
| Gross margin | 2,790,000 | 2,114,500 | ||||
| Selling and administrative expenses: | ||||||
| Selling expenses | 1,386,000 | 1,080,500 | ||||
| Administrative expenses | 706,500 | 608,000 | ||||
| Total expenses | 2,092,500 | 1,688,500 | ||||
| Net operating income | 697,500 | 426,000 | ||||
| Interest expense | 104,000 | 84,000 | ||||
| Net income before taxes | $ | 593,500 | $ | 342,000 | ||
Members of the company’s board of directors are surprised to see that net income increased by only $251,500 when sales increased by $1,776,000.
Required:
1. Express each year's income statement in common-size percentages. (Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)
Solutions
Expert Solution
Sales has been taken the basis of percentage
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ekkarill92 answered 1 year agoRelated Solutions
A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: McKenzie Sales, Ltd....
A comparative income statement is given below for McKenzie
Sales, Ltd., of Toronto:
McKenzie Sales, Ltd.
Comparative Income Statement
This Year
Last Year
Sales
$
7,360,000
$
5,593,600
Cost of goods sold
4,680,000
3,509,500
Gross margin
2,680,000
2,084,100
Selling and administrative expenses:
Selling expenses
1,388,000
1,075,500
Administrative expenses
705,500
616,500
Total expenses
2,093,500
1,692,000
Net operating income
586,500
392,100
Interest expense
101,000
94,000
Net income before taxes
$
485,500
$
298,100
Members of the company’s board of directors are surprised...
A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: McKenzie Sales, Ltd....
A comparative income statement is given below for McKenzie
Sales, Ltd., of Toronto:
McKenzie Sales, Ltd.
Comparative Income Statement
This Year
Last Year
Sales
$
7,380,000
$
5,608,800
Cost of goods sold
4,650,000
3,512,000
Gross margin
2,730,000
2,096,800
Selling and administrative expenses:
Selling expenses
1,400,000
1,075,000
Administrative expenses
708,500
613,500
Total expenses
2,108,500
1,688,500
Net operating income
621,500
408,300
Interest expense
105,000
91,000
Net income before taxes
$
516,500
$
317,300
Members of the company’s board of directors are surprised...
A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: McKenzie Sales, Ltd....
A comparative income statement is given below for McKenzie
Sales, Ltd., of Toronto: McKenzie Sales, Ltd. Comparative Income
Statement This Year Last Year Sales $ 7,370,000 $ 5,601,200 Cost of
goods sold 4,760,000 3,507,500 Gross margin 2,610,000 2,093,700
Selling and administrative expenses: Selling expenses 1,380,000
1,073,500 Administrative expenses 709,500 615,000 Total expenses
2,089,500 1,688,500 Net operating income 520,500 405,200 Interest
expense 106,000 89,000 Net income before taxes $ 414,500 $ 316,200
Members of the company’s board of directors are surprised...
A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: McKenzie Sales, Ltd....
A comparative income statement is given below for McKenzie
Sales, Ltd., of Toronto:
McKenzie Sales, Ltd.
Comparative Income Statement
This Year
Last Year
Sales
$
7,320,000
$
5,563,200
Cost of goods sold
4,660,000
3,510,500
Gross margin
2,660,000
2,052,700
Selling and administrative expenses:
Selling expenses
1,383,000
1,072,500
Administrative expenses
704,000
613,500
Total expenses
2,087,000
1,686,000
Net operating income
573,000
366,700
Interest expense
105,000
84,000
Net income before taxes
$
468,000
$
282,700
Members of the company’s board of directors are surprised...
A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: McKenzie Sales, Ltd....
A comparative income statement is given below for McKenzie
Sales, Ltd., of Toronto:
McKenzie Sales, Ltd.
Comparative Income Statement
This Year
Last Year
Sales
$
7,310,000
$
5,555,600
Cost of goods sold
4,670,000
3,509,000
Gross margin
2,640,000
2,046,600
Selling and administrative expenses:
Selling expenses
1,393,000
1,074,000
Administrative expenses
705,000
610,000
Total expenses
2,098,000
1,684,000
Net operating income
542,000
362,600
Interest expense
103,000
85,000
Net income before taxes
$
439,000
$
277,600
Members of the company’s board of directors are surprised...
Presented below isthe comparative statement of income, prepared on a cash basis, for Mingwei Ltd. for...
Presented below isthe comparative statement of income, prepared
on a cash basis, for Mingwei Ltd. for the past two years. The
manager is puzzled by the fact that net income was lower in2023than
2022.MINGWEI LTD.Statementof Income, Cash BasisYears EndedDecember
31——————————————————————————————————————————20232022Service
revenue.........................................................................$350,000$365,000ExpensesSalaries
expense.................................................................200,000190,000Office
expense....................................................................54,00055,000Repairs
and maintenance
expense.....................................20,00015,000Interest
expense..................................................................15,0002,000Total
expenses...........................................................................289,000262,000Income
before income
tax..........................................................61,000103,000Income
tax
expense...................................................................24,40041,200Net
income.................................................................................$
36,600$ 61,800In talking with the manager, you gather the following
information, which was not reflected in the above statements:1.The
company borrowed $200,000 on June 1, 2022and...
An extract from the income statement of PoMA Ltd for the previous year is given below: &
An extract from the income statement of PoMA Ltd for the
previous year is given
below:
Rs.
Sales (50,000
units)
1,000,000
Direct
materials
350,000
Direct labor cost (50,000
hours)
200,000
Fixed manufacturing
overhead
190,000
Variable manufacturing
overhead
50,000
Administration
overheads
180,000
Selling and distribution
overhead
120,000
The directors are keen to improve revenue and productivity and
are considering various
options.
You are the management accountant and are requested to compute the
following:
...
A comparative balance sheet and an income statement for Burgess Company are given below: Burgess Company...
A comparative balance sheet and an income statement for Burgess
Company are given below: Burgess Company Comparative Balance Sheet
(dollars in millions) Ending Balance Beginning Balance Assets
Current assets: Cash and cash equivalents $ 48 $ 99 Accounts
receivable 730 669 Inventory 695 646 Total current assets 1,473
1,414 Property, plant, and equipment 1,595 1,565 Less accumulated
depreciation 824 678 Net property,plant, and equipment 771 887
Total assets $ 2,244 $ 2,301 Liabilities and Stockholders' Equity
Current liabilities: Accounts payable...
A comparative balance sheet and an income statement for Burgess Company are given below: Burgess Company...
A comparative balance sheet and an income statement for Burgess
Company are given below:
Burgess Company
Comparative Balance Sheet
(dollars in millions)
Ending Balance
Beginning Balance
Assets
Current assets:
Cash and cash equivalents
$
69
$
141
Accounts receivable
940
858
Inventory
800
730
Total current assets
1,809
1,729
Property, plant, and
equipment
1,805
1,754
Less accumulated
depreciation
950
741
Net property,plant, and
equipment
855
1,013
Total assets
$
2,664
$
2,742
Liabilities and
Stockholders' Equity
Current liabilities:
Accounts payable...
A comparative balance sheet and an income statement for Burgess Company are given below: Burgess Company...
A comparative balance sheet and an income statement for Burgess
Company are given below:
Burgess Company
Comparative Balance Sheet
(dollars in millions)
Ending Balance
Beginning Balance
Assets
Current assets:
Cash and cash equivalents
$
49
$
79
Accounts receivable
645
580
Inventory
660
615
Total current assets
1,354
1,274
Property, plant, and equipment
1,515
1,466
Less accumulated depreciation
765
641
Net property, plant, and equipment
750
825
Total assets
$
2,104
$
2,099
Liabilities and Stockholders' Equity
Current liabilities:
Accounts...
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