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


Related 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...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT