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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 $ 7,310,000 $ 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 to see that net income increased by only $161,400 when sales increased by $1,754,400.

Required:

1. Express each year's income statement in common-size percentages.

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ekkarill92 answered 1 year ago
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