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

Comment below if you have any query i will solve it to the earliest !! thanks

ekkarill92 answered 1 year ago
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