Question

question#2

SHOW Me How Calculator 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. - Tannenhill Company Electronics Industry Average Sales 100 % Cost of goods sold Gross profit 26 % Selling expenses 14 % $1,870,000 1,290,300 $579,700 $336,600 130,900 $467,500 $112,200 37,400 Administrative expenses Total operating expenses Operating income Other income $149,600 Other expense Income before income tax Income tax expense 18,700 $130,900 56,100 $74,800 Net income a. Prepare a common-sized Income statement comparing the results of operations for Tannenhill Company with the industry average. I required, round percentages to one decimal place. Enter all amounts as positive numbers.

Answer 1

A common size income statement is an income statement in which each line item is expressed as a percentage of sales/revenue. Refer attached image for solution.

Tannehill Company Common-sized Income statement For the year ended December 31 Particulars Tannehill Tannehill Electronics Company Company Industry Amount Percent average Sales $1,870,000 100% 100% Cost of goods sold $1.290,300 69% 74% Gross profit $579,700 31% 26% Selling expenses $336,600 18% 14% Administrative expenses - $ 130,900 7% 6% Total operating expenses $467,500 25% 20% 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% 4%