In: Accounting
Common-Sized Income Statement
Revenue and expense data for the current calendar year for Sorenson Electronics Company and for the electronics industry are as follows. Sorenson Electronics Company data are expressed in dollars. The electronics industry averages are expressed in percentages.
Sorenson Electronics Company |
Electronics Industry Average |
||||
Sales | $1,710,000 | 100 | % | ||
Cost of goods sold | (1,162,800) | (71) | |||
Gross profit | $547,200 | 29 | % | ||
Selling expenses | $(307,800) | (12) | % | ||
Administrative expenses | (119,700) | (11) | |||
Total operating expenses | $(427,500) | (23) | % | ||
Operating income | $119,700 | 6 | % | ||
Other revenue and expense: | |||||
Other revenue | 34,200 | 4 | |||
Other expense | (17,100) | (3) | |||
Income before income tax | $136,800 | 7 | % | ||
Income tax expense | (51,300) | (4) | |||
Net income | $85,500 | 3 | % |
a. Prepare a common-sized income statement comparing the results of operations for Sorenson Electronics Company with the industry average. If required, round percentages to one decimal place.
Sorenson Electronics Company | |||
Common-Sized Income Statement | |||
Sorenson Electronics Company Amount |
Sorenson Electronics Company Percent |
Electronics Industry Average |
|
Sales | $1,710,000 | % | 100% |
Cost of Goods Sold | (1,162,800) | % | (71)% |
Gross profit | $547,200 | % | 29% |
Selling Expenses | $(307,800) | % | (12)% |
Administrative Expenses | (119,700) | % | (11)% |
Total operating expenses | $(427,500) | % | (23)% |
Operating income | $119,700 | % | 6% |
Other revenue and expense: | |||
Other revenue | 34,200 | % | 4% |
Other expense | (17,100) | % | (3)% |
Income before income tax | $136,800 | % | 7% |
Income tax expense | (51,300) | % | (4)% |
Net income | $85,500 | % | 3% |