Question

Express the following comparative income statements in common-size percents. (Round your percentage answers to 1 decimal place.) GOMEZ CORPORATION Comparative Income Statements For Years Ended December 31 Current Year Prior Year $ % $ % Sales $785,000 $640,000 Cost of goods sold 568,100 288,800 Gross profit 216,900 351,200 Operating expenses 130,400 221,600 Net income $86,500 $129,600

Answer 1

Answer:

GOMEZ CORPORATION

Comparative Income Statements

For Years Ended December 31

                                          Current Year                     Prior Year

                                              $                 %                          $                      %

Sales                                  $785,000      100                    $640,000         100

Cost of goods sold                568,100     72.4                     288,800         45.1

Gross profit                            216,900     27.6                     351,200         54.9

Operating expenses                130,400    16.6                     221,600         34.6

Net income                               $86,500   11.0                       $129,600     20.3

The figure used to calculate the percentages is that of sale revenue. Each figure is expressed as a percentage of sales to determine the percent of expenses , profits etc.