A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: ...
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Accounting
| A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: |
| McKenzie Sales, Ltd. Comparative Income Statement | ||||||
| This Year | Last Year | |||||
| Sales | $ | 7,340,000 | $ | 5,578,400 | ||
| Cost of goods sold | 4,760,000 | 3,514,000 | ||||
| Gross margin | 2,580,000 | 2,064,400 | ||||
| Selling and administrative expenses: | ||||||
| Selling expenses | 1,390,000 | 1,074,000 | ||||
| Administrative expenses | 710,500 | 614,500 | ||||
| Total expenses | 2,100,500 | 1,688,500 | ||||
| Net operating income | 479,500 | 375,900 | ||||
| Interest expense | 101,000 | 87,000 | ||||
| Net income before taxes | $ | 378,500 | $ | 288,900 | ||
| Members of the companys board of directors are surprised to see that net income increased by only $89,600 when sales increased by $1,761,600. |
| 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).) |
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