Question

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 $2,480,000 100 % Cost of goods sold 1,587,200 70 Gross profit $892,800 30 % Selling expenses $545,600 17 % Administrative expenses 198,400 7 Total operating expenses $744,000 24 % Operating income $148,800 6 % Other revenue 49,600 2 $198,400 8 % Other expense 24,800 1 Income before income tax $173,600 7 % Income tax expense 74,400 5 Net income $99,200 2 %

Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average.

Answer 1

Step-by-step explanation:

A common sized income statement is a method of financial statement that express every line item on a financial statement as a percentage of sale for the ease of financial analysis

Tannenhill's % Industry average

Revenue 2,480,000 100 100%

Cost of Goods 1,587,200 64 70

Gross profit 892,800 36 30

Selling expenses 545600 22 17

Admin expenses 198400 8 7

Total ope. Expe. 744000 30 24

Ope. Income 148600 6 6

Other Revenue 49600 2 2

198400 8 8

Other Expenses 24800 1 1

PBIT 173600 7 7

Income Tax 74400 3 5

Net Income 99200 4 2