PE 12-11 Comparative Common-Size Income Statement Using the following data, (1) prepare comparative common-size income statements for Years 1 and 2 and (2) briefly outline why return on sales is lower in Year 2 (1.8%) compared to Year 1 (7.0%). Sales Cost of goods sold Gross profit Operating expenses Operating income Interest expense Income before income taxes Income tax expense Net income Year 2 $ 100,000 70,000 $ 30,000 25,000 $5,000 2,000 3,000 1,200 1,800 $ Year 1 $80,000 50,000 $30,000 20,000 STUKENT $10,000 2,000 $ 8,000 2,400 $ 5,600 Lul
PE 12-11 Comparative Common-Size Income Statement Using the following data, (1) prepare comparative common-size income statements for Years 1 and 2 and (2) briefly outline why return on sales is lower in Year 2 (1.8%) compared to Year 1 (7.0%). Sales Cost of goods sold Gross profit Operating expenses Operating income Interest expense Income before income taxes Income tax expense Net income Year 2 $ 100,000 70,000 $ 30,000 25,000 $5,000 2,000 3,000 1,200 1,800 $ Year 1 $80,000 50,000 $30,000 20,000 STUKENT $10,000 2,000 $ 8,000 2,400 $ 5,600 Lul
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:PE 12-11 Comparative Common-Size Income Statement
Using the following data, (1) prepare comparative common-size income statements for
Years 1 and 2 and (2) briefly outline why return on sales is lower in Year 2 (1.8%)
compared to Year 1 (7.0%).
Sales
Cost of goods sold
Gross profit
Operating expenses
Operating income
Interest expense
Income before income taxes
Income tax expense
Net income
Year 2
$ 100,000
70,000
$ 30,000
25,000
$ 5,000
2,000
3,000
1,200
1,800
$
$
Year 1
$80,000
50,000
$30,000
20,000
STUKENT
$10,000
2,000
$ 8,000
2,400
$ 5,600
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