Question

In: Accounting

Consider the following income statement data from the Ross Company:

 

Common-Size Income Statements
Consider the following income statement data from the Ross Company:

 

2013

2012

Sales revenue

$527,000

$452,000

Cost of goods sold

338,000

281,000

Selling expenses

107,000

101,000

Administrative expenses

60,000

54,000

Income tax expense

7,800

5,400


Prepare common-size income statements for each year. Round percentages to one decimal point.

ROSS COMPANY
Common-Size Income Statements
(Percent of Sales Revenue)

 

2013

2012

   

Sales Revenue

Answer

 

%

Answer

 

%

   

Cost of Goods Sold

Answer

 

%

Answer

 

%

   

Answer

       

 

Answer

 

%

Answer

 

%

Answer

   
               

 

   

Selling Expenses

Answer

 

%

Answer

 

%

Administrative Expenses

Answer

 

%

Answer

 

%

Total

Answer

 

%

Answer

 

%

Income before Income Taxes

Answer

 

%

Answer

 

%

Answer

   

 

Answer

 

%

Answer

 

%

Answer

   

 

Answer

 

%

Answer

 

%

Solutions

Expert Solution

  • Common Size Income Statements

2013

2012

Amount

[% Answer value]

Amount

[% Answer value]

Sales revenue

$              527,000

100.0%

$                                        452,000

100.0%

Cost of goods sold

$              338,000

64.1%

$                                        281,000

100.0%

Gross Profits

$              189,000

35.9%

$                                        171,000

100.0%

Operating Expenses:

Selling expenses

$              107,000

20.3%

$                                        101,000

100.0%

Administrative expenses

$                60,000

11.4%

$                                          54,000

100.0%

Total Operating Expenses

$              167,000

31.7%

$                                        155,000

100.0%

Income before Income taxes

$                22,000

4.2%

$                                          16,000

100.0%

Income tax expense

$                   7,800

1.5%

$                                            5,400

100.0%

Net Income

$                14,200

2.7%

$                                          10,600

100.0%


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