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A comparative income statement is given below for McKenzie Sales, Limited, of Toronto: McKenzie Sales, Limited Comparative Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Total expenses Net operating income Administrative expenses Interest expense Net income before taxes This Year $ 7,380,000 4,680,000 2,700,000 Last Year $ 5,608,800 3,512,500 2,096,300 1,398,000 1,078,500 710,000 615,500 2,108,000 592,000 96,000 1,694,000 402,300 $ 496,000 88,000 $ 314,300 Members of the company's board of directors are surprised to see that net income increased by only $181,700 when sales increased by $1,771,200. Required: 1. Express each year's income statement in common-size percentages. (Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) This Year Last Year Sales Cost of goods sold % % % % Gross margin 0.0 % 0.0 % Selling and administrative expenses: Selling expenses % % Administrative expenses % % Total selling and administrative expenses 0.0 % 0.0 % Net operating income 0.0 % 0.0 % Interest expense % % Net income before taxes 0.0 % 0.0 %

A comparative income statement is given below for McKenzie Sales, Limited, of Toronto: McKenzie Sales, Limited Comparative Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Total expenses Net operating income Administrative expenses Interest expense Net income before taxes This Year $ 7,380,000 4,680,000 2,700,000 Last Year $ 5,608,800 3,512,500 2,096,300 1,398,000 1,078,500 710,000 615,500 2,108,000 592,000 96,000 1,694,000 402,300 $ 496,000 88,000 $ 314,300 Members of the company's board of directors are surprised to see that net income increased by only $181,700 when sales increased by $1,771,200. Required: 1. Express each year's income statement in common-size percentages. (Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) This Year Last Year Sales Cost of goods sold % % % % Gross margin 0.0 % 0.0 % Selling and administrative expenses: Selling expenses % % Administrative expenses % % Total selling and administrative expenses 0.0 % 0.0 % Net operating income 0.0 % 0.0 % Interest expense % % Net income before taxes 0.0 % 0.0 %

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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A comparative income statement is given below for McKenzie Sales, Limited, of Toronto: McKenzie Sales, Limited Comparative Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Total expenses Net operating income Administrative expenses Interest expense Net income before taxes This Year $ 7,380,000 4,680,000 2,700,000 Last Year $ 5,608,800 3,512,500 2,096,300 1,398,000 1,078,500 710,000 615,500 2,108,000 592,000 96,000 1,694,000 402,300 $ 496,000 88,000 $ 314,300 Members of the company's board of directors are surprised to see that net income increased by only $181,700 when sales increased by $1,771,200. Required: 1. Express each year's income statement in common-size percentages. (Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) This Year Last Year Sales Cost of goods sold % % % % Gross margin 0.0 % 0.0 % Selling and administrative expenses: Selling expenses % % Administrative expenses % % Total selling and administrative expenses 0.0 % 0.0 % Net operating income 0.0 % 0.0 % Interest expense % % Net income before taxes 0.0 % 0.0 %
Transcribed Image Text:A comparative income statement is given below for McKenzie Sales, Limited, of Toronto: McKenzie Sales, Limited Comparative Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Total expenses Net operating income Administrative expenses Interest expense Net income before taxes This Year $ 7,380,000 4,680,000 2,700,000 Last Year $ 5,608,800 3,512,500 2,096,300 1,398,000 1,078,500 710,000 615,500 2,108,000 592,000 96,000 1,694,000 402,300 $ 496,000 88,000 $ 314,300 Members of the company's board of directors are surprised to see that net income increased by only $181,700 when sales increased by $1,771,200. Required: 1. Express each year's income statement in common-size percentages. (Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) This Year Last Year Sales Cost of goods sold % % % % Gross margin 0.0 % 0.0 % Selling and administrative expenses: Selling expenses % % Administrative expenses % % Total selling and administrative expenses 0.0 % 0.0 % Net operating income 0.0 % 0.0 % Interest expense % % Net income before taxes 0.0 % 0.0 %
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