Prepare a common-sized income statement comparing the results of operations for
ID: 2328329 • Letter: P
Question
Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. If required, round percentages to one decimal place. Enter all amounts as positive numbers.
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.
TannenhillCompany Electronics
Industry
Average Sales $1,870,000 100 % Cost of goods sold 1,122,000 66 Gross profit $748,000 34 % Selling expenses $448,800 20 % Administrative expenses 187,000 8 Total operating expenses $635,800 28 % Operating income $112,200 6 % Other income 37,400 2 $149,600 8 % Other expense 18,700 1 Income before income tax $130,900 7 % Income tax expense 56,100 3 Net income $74,800 4 %
Explanation / Answer
Tannenhill company Electronics Industry Average (a) Sales % [ (a) / $18,70,000] Sales $ 18,70,000 100% 100% Cost of goods sold $ 11,22,000 60% 66% Gross profit $ 7,48,000 40% 34% Selling expenses $ 4,48,800 24% 20% Administrative expenses $ 1,87,000 10% 8% Total operating expenses $ 6,35,800 34% 28% Operating Income $ 1,12,200 6% 6% Other income $ 37,400 2% 2% $ 1,49,600 8% 8% Other expenses $ 18,700 1% 1% Income before income tax $ 1,30,900 7% 7% Income tax expense $ 56,100 3% 3% Net Income $ 74,800 4% 4%