Question

Selected comparative financial statements of Apple-Space follow:

Apple-Space

Comparative Income Statements
For Years Ended December 31, 2017, 2016, and 2015
	2017			2016			2015
Sales	$	464,983		$	356,215		$	247,200
Cost of goods sold		279,920			225,840			158,208
Gross profit		185,063			130,375			88,992
Selling expenses		66,028			49,158			32,630
Administrative expenses		41,848			31,347			20,518
Total expenses		107,876			80,505			53,148
Income before taxes		77,187			49,870			35,844
Income taxes		14,357			10,223			7,276
Net income	$	62,830		$	39,647		$	28,568

Apple-Space
Comparative Balance Sheets
December 31, 2017, 2016, and 2015
	2017			2016			2015
Assets
Current assets	$	48,618		$	38,038		$	50,847
Long-term investments		0			800			4,310
Plant assets, net		88,915			94,712			55,489
Total assets	$	137,533		$	133,550		$	110,646
Liabilities and Equity
Current liabilities	$	20,080		$	19,899		$	19,363
Common stock		66,000			66,000			48,000
Other paid-in capital		8,250			8,250			5,333
Retained earnings		43,203			39,401			37,950
Total liabilities and equity	$	137,533		$	133,550		$	110,646

2. Complete the below table to calculate income statement data in common-size percents. (Round your percentage answers to 2 decimal places.)

Common-Size Comparative Income Statements For Years Ended December 31, 2017, 2016, and 2015 2017 2016 2015 Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total expenses Income before taxes Income taxes Net income

Answer 1

Ans:

For preparing the common-size percentage, all the amounts in the income statement would be divided by the sales. Sales percentage should be 100%. Based on the sales value, remaining percentages are calculated.

Comparative Income Statements
For Years Ended December 31, 2017, 2016, and 2015
	2017			2016			2015
Sales	$	464,983	100%	$	356,215	100%	$	247,200	100%
Cost of goods sold		279,920	60.20		225,840	63.4		158,208	64
Gross profit		185,063	39.80		130,375	36.6		88,992	36
Selling expenses		66,028	14.20		49,158	13.8		32,630	13.2
Administrative expenses		41,848	9		31,347	8.8		20,518	8.3
Total expenses		107,876	23.2		80,505	22.6		53,148	21.5
Income before taxes		77,187	16.6		49,870	14		35,844	14.5
Income taxes		14,357	3.09		10,223	2.87		7,276	2.94
Net income	$	62,830	13.51	$	39,647	11.13	$	28,568	11.56