Common-Sized Income Statement
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 | $1,010,000 | 100 | % | ||
Cost of goods sold | 545,400 | 60 | |||
Gross profit | $464,600 | 40 | % | ||
Selling expenses | $292,900 | 24 | % | ||
Administrative expenses | 111,100 | 10 | |||
Total operating expenses | $404,000 | 34 | % | ||
Operating income | $60,600 | 6 | % | ||
Other revenue | 20,200 | 2 | |||
$80,800 | 8 | % | |||
Other expense | 10,100 | 1 | |||
Income before income tax | $70,700 | 7 | % | ||
Income tax expense | 30,300 | 5 | |||
Net income | $40,400 | 2 | % |
a. 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.
Tannenhill Company | |||
Common-Sized Income Statement | |||
For the Year Ended December 31 | |||
Tannenhill Company Amount |
Tannenhill Company Percent |
Electronics Industry Average |
|
Sales | $1,010,000 | % | 100.0% |
Cost of goods sold | 545,400 | % | 60% |
Gross profit | $464,600 | % | 40% |
Selling expenses | $292,900 | % | 24% |
Administrative expenses | 111,100 | % | 10% |
Total operating expenses | $404,000 | % | 34% |
Income from operations | $60,600 | % | 6% |
Other revenue | 20,200 | % | 2% |
$80,800 | % | 8% | |
Other expense | 10,100 | % | 1% |
Income before income tax | $70,700 | % | 7% |
Income tax expense | 30,300 | % | 5% |
Net income | $40,400 | % | 2% |
b. The company is managing the cost of manufacturing product than the industry, and has slightly selling and administrative expenses relative to the industry. The combined impact causes net income as a percent of sales to be than the industry average.
Tannehil | Tannehil | Electronics | |||
Company | Company | Industry | |||
Amount | Percent | Average | |||
Sales | $1,010,000.00 | 100.00% | 100.00% | ||
Cost of Goods Sold | $545,000.00 | 53.96% | 60.00% | ||
Gross Profit | $464,600.00 | 46.00% | 40.00% | ||
Selling Expenses | $292,900.00 | 29.00% | 24.00% | ||
Administrative Expenses | $111,100.00 | 11.00% | 10.00% | ||
Total operating expenses | $404,000.00 | 40.00% | 34.00% | ||
income From Operations | $60,600.00 | 6.00% | 6.00% | ||
Other Revenue | $20,200.00 | 2.00% | 2.00% | ||
$80,800.00 | 8.00% | 8.00% | |||
Other expenses | $10,100.00 | 1.00% | 1.00% | ||
Income Before Income Tax | $70,700.00 | 7.00% | 7.00% | ||
Income Tax Expenses | $30,300.00 | 3.00% | 5.00% | ||
Net Income | $40,400.00 | 4.00% | 2.00% | ||
b.) | |||||
The Company is managing the cost of manufacturing product | |||||
BETTER than the industry, and has slightly HIGHER selling and administrative | |||||
relative to the industry. The Combined impact Net Income causes net income | |||||
as a percent of sales to be HIGHER than the industry average |
THANK YOU
HOPING FOR A POSITIVE RESPONSE
Common-Sized Income Statement Revenue and expense data for the current calendar year for Tannenhill Company and...
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Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. Round percentages to one decimal place. Enter all amounts as positive numbers. Percentage sign will appear automatically.Tannenhill CompanyCommon-Sized Income StatementFor the Year Ended December 311Tannenhill CompanyTannenhill CompanyElectronics Industry Average2AmountPercent3Sales$4,720,000.00100.0%4Cost of goods sold2,454,400.0057.05Gross profit$2,265,600.0043.0%6Selling expenses$1,250,800.0023.57Administrative expenses708,000.0013.08Total operating expenses$1,958,800.0036.5%9Income from operations$306,800.006.5%10Other revenue102,000.002.211$408,800.008.7%12Other expense62,000.001.313Income before income tax$346,800.007.4%14Income tax expense72,000.001.515Net income$274,800.005.9%