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1. Prepare common size income statements for Guangyi Company, a partnership, for two years shown below by converting the money amounts into percentages. For each year, sales will appear as 100% and other items will be expressed as a percentage of sales. 4 Comment on whether the changes from 2011 to 2012 are favorable or unfavorable. Sales Cost of goods sold Gross profit Operating expenses Net income 2011 500,000 330, 000 170, 000 140,000 30, 000 2012 400,000 268,000 132, 000 116, 000 16,000

1. Prepare common size income statements for Guangyi Company, a partnership, for two years shown below by converting the money amounts into percentages. For each year, sales will appear as 100% and other items will be expressed as a percentage of sales. 4 Comment on whether the changes from 2011 to 2012 are favorable or unfavorable. Sales Cost of goods sold Gross profit Operating expenses Net income 2011 500,000 330, 000 170, 000 140,000 30, 000 2012 400,000 268,000 132, 000 116, 000 16,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. Prepare common size income statements for Guangyi Company, a partnership, for two years shown below by converting the money amounts into percentages. For each year, sales will appear as 100% and other items will be expressed as a percentage of sales. Comment on whether the changes from 2011 to 2012 are favorable or unfavorable. Sales Cost of goods sold Gross profit Operating expenses Net income 2011 500,000 330, 000 170, 000 140,000 30,000 2012 400, 000 268,000 132, 000 116, 000 16, 000
Transcribed Image Text:1. Prepare common size income statements for Guangyi Company, a partnership, for two years shown below by converting the money amounts into percentages. For each year, sales will appear as 100% and other items will be expressed as a percentage of sales. Comment on whether the changes from 2011 to 2012 are favorable or unfavorable. Sales Cost of goods sold Gross profit Operating expenses Net income 2011 500,000 330, 000 170, 000 140,000 30,000 2012 400, 000 268,000 132, 000 116, 000 16, 000
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