A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: McKenzie Sales, Ltd. Comparative Income Statement This Year $7,350, 000 4,630, 000 2,720, 000 Last Year $5,586, 000 3,510, 000 2,076, 000 Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total expenses Net operating income Interest expense 1, 382, 000 703, 500 2,085, 500 634,500 105, 000 1,074, 500 615, 500 1,690, 000 386, 000 91, 000 Net income before taxes $529,500 $ 295, 000 Members of the company's board of directors are surprised to see that net income increased by only $234,500 when sales increased

A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: McKenzie Sales, Ltd. Comparative Income Statement This Year $7,350, 000 4,630, 000 2,720, 000 Last Year $5,586, 000 3,510, 000 2,076, 000 Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total expenses Net operating income Interest expense 1, 382, 000 703, 500 2,085, 500 634,500 105, 000 1,074, 500 615, 500 1,690, 000 386, 000 91, 000 Net income before taxes $529,500 $ 295, 000 Members of the company's board of directors are surprised to see that net income increased by only $234,500 when sales increased

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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