Compute common-size percents for the following comparative income statements (round percents to one decimal). Using the common-size percents, which item is most responsible for the decline in net income? GOMEZ CORPORATIONComparative Income StatementsFor Years Ended December 31Current YrPrior YrSales ....$740,000 $625,000Cost of goods sold..Gross profit....Operating expenses.Net income.560,300290,800179,700334,200128,200218,500$ 51,500$115,700

Common Size Income Statement for current year Particulars Amount % Sales 740,000 100% Cost…

GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Yr Prior Yr Sales .... $740,000 $625,000 Cost of goods sold.. Gross profit.... Operating expenses. Net income. 560,300 290,800 179,700 334,200 128,200 218,500 $ 51,500 $115,700

GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Yr Prior Yr Sales .... $740,000 $625,000 Cost of goods sold.. Gross profit.... Operating expenses. Net income. 560,300 290,800 179,700 334,200 128,200 218,500 $ 51,500 $115,700

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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Question

Compute common-size percents for the following comparative income statements (round percents to one
decimal). Using the common-size percents, which item is most responsible for the decline in net income?

GOMEZ CORPORATION
Comparative Income Statements
For Years Ended December 31
Current Yr
Prior Yr
Sales ....
$740,000 $625,000
Cost of goods sold..
Gross profit....
Operating expenses.
Net income.
560,300
290,800
179,700
334,200
128,200
218,500
$ 51,500
$115,700

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