Question

Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. The Tannenhill’s data are expressed in dollars. The electronics industry averages are expressed in percentages.

1		Tannenhill Company	Electronics Industry Average
2	Sales	$4,000,000.00	100.0%
3	Cost of goods sold	2,120,000.00	60.0
4	Gross profit	$1,880,000.00	40.0%
5	Selling expenses	$1,080,000.00	24.0%
6	Administrative expenses	640,000.00	14.0
7	Total operating expenses	$1,720,000.00	38.0%
8	Operating income	$160,000.00	2.0%
9	Other income	120,000.00	3.0
10		$280,000.00	5.0%
11	Other expense	80,000.00	2.0
12	Income before income tax	$200,000.00	3.0%
13	Income tax expense	80,000.00	2.0
14	Net income	$120,000.00	1.0%

A.	Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. Enter all amounts as positive numbers.

Answer 1

	Tannenhill Company	Tannenhill Company Percent	Electronics Industry Average
Sales	4000000	100%	100%
Cost of goods sold	2120000	53%	60%
Gross profit	1880000	47%	40%
Selling expenses	1080000	27%	24%
Administrative expenses	640000	16%	14%
Total operating expenses	1720000	43%	38%
Operating income	160000	4%	2%
Other income	120000	3%	3%
	280000	7%	5%
Other expense	80000	2%	2%
Income before income tax	200000	5%	3%
Income tax expense	80000	2%	2%
Net income	120000	3%	1%