Question

Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics...

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.

Homework Answers

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%
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