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Exercise 15-1 Common-Size Income Statement [LO15-1] A comparative income statement is given...

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Accounting

Exercise 15-1 Common-Size Income Statement [LO15-1]

A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto:

McKenzie Sales, Ltd. Comparative Income Statement
This Year Last Year
Sales $ 7,370,000 $ 5,601,200
Cost of goods sold 4,610,000 3,507,000
Gross margin 2,760,000 2,094,200
Selling and administrative expenses:
Selling expenses 1,382,000 1,074,500
Administrative expenses 706,000 609,000
Total expenses 2,088,000 1,683,500
Net operating income 672,000 410,700
Interest expense 102,000 93,000
Net income before taxes $ 570,000 $ 317,700

Members of the companys board of directors are surprised to see that net income increased by only $252,300 when sales increased by $1,768,800.

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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