Answer:
Preparation of income statement is shown below:-
Explanation:
Comparative Income Statement
2018 2018 2017 2017
Amount Percent Amount Percent
Sales $900,000 100.0% $725,000 100.0%
Less:
Cost of Goods Sold $558,000 62.0% $435,000 60.0%
Gross Profit (A) $342,000 38.0% $290,000 40.0%
Selling Expense $117,000 13.0% $116,000 16.0%
Administrative
Expense $63,000 7.0% $65,250 9.0%
Total Operating
Expense (B) $180,000 20.0% $181,250 25.0%
Income from
Operation (A-B) $162,000 18.0% $108,750 15.0%
Less: Income
Tax Expense $76,500 8.5% $58,000 8.0%
Net Income $85,500 9.5% $50,750 7.0%
Formula for Computation of Percentage :- (Cost of Goods Sold or Gross Profit etc. of particular period ÷ Sales for such period)
