Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. Tannenhill's data are expressed in dollars. The electronics industry averages are expressed in percentages. Tannenhill Company Electronics Industry Average Sales $4,000,000 100.0 % Cost of merchandise sold 2,120,000 60.0 Gross profit $1,880,000 40.0 % Selling expenses $1,080,000 24.0 % Administrative expenses 640,000 14.0 Total operating expenses $1,720,000 38.0 % Income from operations $160,000 2.0 % Other revenue and expense: Other revenue 120,000 3.0 Other expense (80,000) 2.0 Income before income tax expense $200,000 3.0 % Income tax expense 80,000 2.0 Net income $120,000 1.0 % a. Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. Enter all amounts as positive numbers. Round to the nearest whole percentage. Tannenhill CompanyCommon-Sized Income StatementFor the Year Ended December 31 Tannenhill Company Amount Tannenhill Company Percent Electronics Industry Average Sales $4,000,000 fill in the blank b711e8fbdf85022_1% 100% Cost of merchandise sold 2,120,000 fill in the blank b711e8fbdf85022_2% 60% Gross profit $1,880,000 fill in the blank b711e8fbdf85022_3% 40% Selling expenses 1,080,000 fill in the blank b711e8fbdf85022_4% 24% Administrative expenses 640,000 fill in the blank b711e8fbdf85022_5% 14% Total operating expenses $1,720,000 fill in the blank b711e8fbdf85022_6% 38% Income from operations 160,000 fill in the blank b711e8fbdf85022_7% 2% Other revenue and expense: Other revenue 120,000 fill in the blank b711e8fbdf85022_8% 3% Other expense (80,000) fill in the blank b711e8fbdf85022_9% 2% Income before income tax expense $200,000 fill in the blank b711e8fbdf85022_10% 3% Income tax expense 80,000 fill in the blank b711e8fbdf85022_11% 2% Net income $120,000 fill in the blank b711e8fbdf85022_12% 1% b. The company is managing the cost of manufacturing product than the industry, and has slightly selling and administrative expenses relative to the industry. The combined impact causes net income as a percent of sales to be than the industry average.

Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. Tannenhill's data are expressed in dollars. The electronics industry averages are expressed in percentages. Tannenhill Company Electronics Industry Average Sales $4,000,000 100.0 % Cost of merchandise sold 2,120,000 60.0 Gross profit $1,880,000 40.0 % Selling expenses $1,080,000 24.0 % Administrative expenses 640,000 14.0 Total operating expenses $1,720,000 38.0 % Income from operations $160,000 2.0 % Other revenue and expense: Other revenue 120,000 3.0 Other expense (80,000) 2.0 Income before income tax expense $200,000 3.0 % Income tax expense 80,000 2.0 Net income $120,000 1.0 % a. Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. Enter all amounts as positive numbers. Round to the nearest whole percentage. Tannenhill CompanyCommon-Sized Income StatementFor the Year Ended December 31 Tannenhill Company Amount Tannenhill Company Percent Electronics Industry Average Sales $4,000,000 fill in the blank b711e8fbdf85022_1% 100% Cost of merchandise sold 2,120,000 fill in the blank b711e8fbdf85022_2% 60% Gross profit $1,880,000 fill in the blank b711e8fbdf85022_3% 40% Selling expenses 1,080,000 fill in the blank b711e8fbdf85022_4% 24% Administrative expenses 640,000 fill in the blank b711e8fbdf85022_5% 14% Total operating expenses $1,720,000 fill in the blank b711e8fbdf85022_6% 38% Income from operations 160,000 fill in the blank b711e8fbdf85022_7% 2% Other revenue and expense: Other revenue 120,000 fill in the blank b711e8fbdf85022_8% 3% Other expense (80,000) fill in the blank b711e8fbdf85022_9% 2% Income before income tax expense $200,000 fill in the blank b711e8fbdf85022_10% 3% Income tax expense 80,000 fill in the blank b711e8fbdf85022_11% 2% Net income $120,000 fill in the blank b711e8fbdf85022_12% 1% b. The company is managing the cost of manufacturing product than the industry, and has slightly selling and administrative expenses relative to the industry. The combined impact causes net income as a percent of sales to be than the industry average.

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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	Tannenhill Company	Electronics Industry Average
Sales	$4,000,000		100.0	%
Cost of merchandise sold	2,120,000		60.0
Gross profit	$1,880,000		40.0	%
Selling expenses	$1,080,000		24.0	%
Administrative expenses	640,000		14.0
Total operating expenses	$1,720,000		38.0	%
Income from operations	$160,000		2.0	%
Other revenue and expense:
Other revenue	120,000		3.0
Other expense	(80,000)		2.0
Income before income tax expense	$200,000		3.0	%
Income tax expense	80,000		2.0
Net income	$120,000		1.0	%

a. Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. Enter all amounts as positive numbers. Round to the nearest whole percentage.

Tannenhill CompanyCommon-Sized Income StatementFor the Year Ended December 31

	Tannenhill Company Amount	Tannenhill Company Percent	Electronics Industry Average
Sales	$4,000,000	fill in the blank b711e8fbdf85022_1%	100%
Cost of merchandise sold	2,120,000	fill in the blank b711e8fbdf85022_2%	60%
Gross profit	$1,880,000	fill in the blank b711e8fbdf85022_3%	40%
Selling expenses	1,080,000	fill in the blank b711e8fbdf85022_4%	24%
Administrative expenses	640,000	fill in the blank b711e8fbdf85022_5%	14%
Total operating expenses	$1,720,000	fill in the blank b711e8fbdf85022_6%	38%
Income from operations	160,000	fill in the blank b711e8fbdf85022_7%	2%
Other revenue and expense:
Other revenue	120,000	fill in the blank b711e8fbdf85022_8%	3%
Other expense	(80,000)	fill in the blank b711e8fbdf85022_9%	2%
Income before income tax expense	$200,000	fill in the blank b711e8fbdf85022_10%	3%
Income tax expense	80,000	fill in the blank b711e8fbdf85022_11%	2%
Net income	$120,000	fill in the blank b711e8fbdf85022_12%	1%

b. The company is managing the cost of manufacturing product

than the industry, and has slightly

selling and administrative expenses relative to the industry. The combined impact causes net income as a percent of sales to be

than the industry average.

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