Question

 

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   %

Answer 1

• 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%