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 4,760,000 3,511,000 Gross margin 2,600,000 2,082,600 Selling and administrative expenses: Selling expenses 1,384,000
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 4,760,000 3,511,000 Gross margin 2,600,000 2,082,600 Selling and administrative expenses: Selling expenses 1,384,000
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 40E: Cuneo Companys income statements for the last 3 years are as follows: Refer to the information for...
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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 | 4,760,000 | 3,511,000 | ||||
Gross margin | 2,600,000 | 2,082,600 | ||||
Selling and administrative expenses: | ||||||
Selling expenses | 1,384,000 | 1,081,500 | ||||
Administrative expenses | 709,000 | 615,000 | ||||
Total expenses | 2,093,000 | 1,696,500 | ||||
Net operating income | 507,000 | 386,100 | ||||
Interest expense | 96,000 | 90,000 | ||||
Net income before taxes | $ | 411,000 | $ | 296,100 | ||
Members of the company’s board of directors are surprised to see that net income increased by only $114,900 when sales increased by $1,766,400.
Required:
1. Express each year's income statement in common-size percentages.
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