Exercise 14-1 (Algo) Common-Size Income Statement [LO14-1] 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 Administrative expenses Total expenses Net operating income Interest expense Net income before taxes This Year $ 7,300,000 4,660,000 2,640,000 1,379,000 711,500 2,090,500 549,500 102,000 $ 447,500 Last Year $ 5,548,000 3,509,000 2,039,000 1,081,000 614,000 1,695,000 344,000 85,000 $ 259,000
Exercise 14-1 (Algo) Common-Size Income Statement [LO14-1] 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 Administrative expenses Total expenses Net operating income Interest expense Net income before taxes This Year $ 7,300,000 4,660,000 2,640,000 1,379,000 711,500 2,090,500 549,500 102,000 $ 447,500 Last Year $ 5,548,000 3,509,000 2,039,000 1,081,000 614,000 1,695,000 344,000 85,000 $ 259,000
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter2: Financial Statements And The Annual Report
Section: Chapter Questions
Problem 2.13MCE
Related questions
Question
![Exercise 14-1 (Algo) Common-Size Income Statement [LO14-1]
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
Administrative expenses
Total expenses
Net operating income
Interest expense
Net income before taxes
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses:
Selling expenses
Administrative expenses
Total selling and administrative expenses
Net operating income
Interest expense
Net income before taxes
Members of the company's board of directors are surprised to see that net income increased by only $188,500 when sales increased
by $1,752,000.
This Year
This Year
$ 7,300,000
4,660,000
2,640,000
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).)
%
%
0.0 %
1,379,000
711,500
2,090,500
549,500
102,000
$ 447,500
%
%
0.0 %
0.0 %
%
0.0 %
Last Year
Last Year
$5,548,000
3,509,000
2,039,000
%
%
0.0 %
1,081,000
614,000
1,695,000
344,000
85,000
$ 259,000
%
%
0.0 %
0.0 %
%
0.0 %](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa99064e2-c0cc-41c5-b091-c3675d185ade%2Fbf15a62d-90fe-4f44-afd3-12172c71773a%2Fdmuzq1u_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 14-1 (Algo) Common-Size Income Statement [LO14-1]
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
Administrative expenses
Total expenses
Net operating income
Interest expense
Net income before taxes
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses:
Selling expenses
Administrative expenses
Total selling and administrative expenses
Net operating income
Interest expense
Net income before taxes
Members of the company's board of directors are surprised to see that net income increased by only $188,500 when sales increased
by $1,752,000.
This Year
This Year
$ 7,300,000
4,660,000
2,640,000
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).)
%
%
0.0 %
1,379,000
711,500
2,090,500
549,500
102,000
$ 447,500
%
%
0.0 %
0.0 %
%
0.0 %
Last Year
Last Year
$5,548,000
3,509,000
2,039,000
%
%
0.0 %
1,081,000
614,000
1,695,000
344,000
85,000
$ 259,000
%
%
0.0 %
0.0 %
%
0.0 %
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Financial Accounting: The Impact on Decision Make…](https://www.bartleby.com/isbn_cover_images/9781305654174/9781305654174_smallCoverImage.gif)
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](https://www.bartleby.com/isbn_cover_images/9781305084087/9781305084087_smallCoverImage.gif)
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781305084087
Author:
Cathy J. Scott
Publisher:
Cengage Learning
![College Accounting (Book Only): A Career Approach](https://www.bartleby.com/isbn_cover_images/9781337280570/9781337280570_smallCoverImage.gif)
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781337280570
Author:
Scott, Cathy J.
Publisher:
South-Western College Pub
![Financial Accounting: The Impact on Decision Make…](https://www.bartleby.com/isbn_cover_images/9781305654174/9781305654174_smallCoverImage.gif)
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](https://www.bartleby.com/isbn_cover_images/9781305084087/9781305084087_smallCoverImage.gif)
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781305084087
Author:
Cathy J. Scott
Publisher:
Cengage Learning
![College Accounting (Book Only): A Career Approach](https://www.bartleby.com/isbn_cover_images/9781337280570/9781337280570_smallCoverImage.gif)
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781337280570
Author:
Scott, Cathy J.
Publisher:
South-Western College Pub
![Cornerstones of Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
![Survey of Accounting (Accounting I)](https://www.bartleby.com/isbn_cover_images/9781305961883/9781305961883_smallCoverImage.gif)
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning