A comparative income statement is given below for McKenzie Sales, Limited, of Toronto: McKenzie Sales, Limited Comparative Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total expenses Net operating income Interest expense Net income before taxes Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses This Year $7,320,000 4,720,000 2,600,000 Administrative expenses Total selling and administrative expenses Net operating income Interest expense Net income before taxes Members of the company's board of directors are surprised to see that net income increased by only $138,800 when sales increased by $1,756,800. This Year 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).) 1,376,000 709,500 2,085,500 514,500 104,000 $ 410,500 % 0.0 % % % 0.0 % 0.0% % 0.0% Last Year $5,563,200 3,511,000 2,052,200 Last Year % 0.0% 1,075,500 614,000 1,689,500 362,700 91,000 $ 271,700 % % 0.0 % 0.0 % % 0.0 %

A comparative income statement is given below for McKenzie Sales, Limited, of Toronto: McKenzie Sales, Limited Comparative Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total expenses Net operating income Interest expense Net income before taxes Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses This Year $7,320,000 4,720,000 2,600,000 Administrative expenses Total selling and administrative expenses Net operating income Interest expense Net income before taxes Members of the company's board of directors are surprised to see that net income increased by only $138,800 when sales increased by $1,756,800. This Year 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).) 1,376,000 709,500 2,085,500 514,500 104,000 $ 410,500 % 0.0 % % % 0.0 % 0.0% % 0.0% Last Year $5,563,200 3,511,000 2,052,200 Last Year % 0.0% 1,075,500 614,000 1,689,500 362,700 91,000 $ 271,700 % % 0.0 % 0.0 % % 0.0 %

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter2: Financial Statements And The Annual Report

Section: Chapter Questions

Problem 2.13MCE

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