Homework Help is Here – Start Your Trial Now!
Business
Accounting
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: Administrative expenses Selling expenses Total expenses Net operating income Interest expense Net income before taxes This Year $ 7,310,000 4,620,000 2,690,000 Last Year $ 5,555,600 3,515,500 2,040,100 1,386,000 1,079,500 709,500 611,000 2,095,500 1,690,500 594,500 98,000 $ 496,500 349,600 91,000 $ 258,600 Members of the company's board of directors are surprised to see that net income increased by only $237,900 when sales increased by $1,754,400. 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).) × Answer is complete but not entirely correct. This Year Last Year Sales 100.0 % 100.0 % Cost of goods sold 63.5 % 63.2 % Gross margin 36.5 % 36.8 % Selling and administrative expenses: Selling expenses 18.9 × % 19.3 % Administrative expenses 9.7 % 11.0 % Total selling and administrative expenses 28.6 % 30.3 % Net operating income 7.9 % 6.5 % Interest expense 1.4 × % 1.6 % Net income before taxes 6.5 % 4.9 %

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: Administrative expenses Selling expenses Total expenses Net operating income Interest expense Net income before taxes This Year $ 7,310,000 4,620,000 2,690,000 Last Year $ 5,555,600 3,515,500 2,040,100 1,386,000 1,079,500 709,500 611,000 2,095,500 1,690,500 594,500 98,000 $ 496,500 349,600 91,000 $ 258,600 Members of the company's board of directors are surprised to see that net income increased by only $237,900 when sales increased by $1,754,400. 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).) × Answer is complete but not entirely correct. This Year Last Year Sales 100.0 % 100.0 % Cost of goods sold 63.5 % 63.2 % Gross margin 36.5 % 36.8 % Selling and administrative expenses: Selling expenses 18.9 × % 19.3 % Administrative expenses 9.7 % 11.0 % Total selling and administrative expenses 28.6 % 30.3 % Net operating income 7.9 % 6.5 % Interest expense 1.4 × % 1.6 % Net income before taxes 6.5 % 4.9 %

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter6: Merchandising Transactions
Section: Chapter Questions
Problem 22Q: The following is select account information for August Sundries. Sales: $850,360; Sales Returns and...
See similar textbooks
icon
Related questions
Question
100%
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: Administrative expenses Selling expenses Total expenses Net operating income Interest expense Net income before taxes This Year $ 7,310,000 4,620,000 2,690,000 Last Year $ 5,555,600 3,515,500 2,040,100 1,386,000 1,079,500 709,500 611,000 2,095,500 1,690,500 594,500 98,000 $ 496,500 349,600 91,000 $ 258,600 Members of the company's board of directors are surprised to see that net income increased by only $237,900 when sales increased by $1,754,400. 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).) × Answer is complete but not entirely correct. This Year Last Year Sales 100.0 % 100.0 % Cost of goods sold 63.5 % 63.2 % Gross margin 36.5 % 36.8 % Selling and administrative expenses: Selling expenses 18.9 × % 19.3 % Administrative expenses 9.7 % 11.0 % Total selling and administrative expenses 28.6 % 30.3 % Net operating income 7.9 % 6.5 % Interest expense 1.4 × % 1.6 % Net income before taxes 6.5 % 4.9 %
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: Administrative expenses Selling expenses Total expenses Net operating income Interest expense Net income before taxes This Year $ 7,310,000 4,620,000 2,690,000 Last Year $ 5,555,600 3,515,500 2,040,100 1,386,000 1,079,500 709,500 611,000 2,095,500 1,690,500 594,500 98,000 $ 496,500 349,600 91,000 $ 258,600 Members of the company's board of directors are surprised to see that net income increased by only $237,900 when sales increased by $1,754,400. 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).) × Answer is complete but not entirely correct. This Year Last Year Sales 100.0 % 100.0 % Cost of goods sold 63.5 % 63.2 % Gross margin 36.5 % 36.8 % Selling and administrative expenses: Selling expenses 18.9 × % 19.3 % Administrative expenses 9.7 % 11.0 % Total selling and administrative expenses 28.6 % 30.3 % Net operating income 7.9 % 6.5 % Interest expense 1.4 × % 1.6 % Net income before taxes 6.5 % 4.9 %
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Principles of Accounting Volume 1
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Financial Accounting: The Impact on Decision Make…
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
College Accounting (Book Only): A Career Approach
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781337280570
Author:
Scott, Cathy J.
Publisher:
South-Western College Pub
College Accounting (Book Only): A Career Approach
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781305084087
Author:
Cathy J. Scott
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS