Question

1. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. Round your percentages to one decimal place. Enter all amounts as positive numbers. Question not attempted. Score: 0/76 Indigo Company Comparative Income Statement For the Years Ended December 31, 2016 and 2015 1 2016 2016 2015 2015 2 Amount Percent Amount Percent 3 Sales $890,000.00 $600,000.00 4 Cost of goods sold 320,400.00 228,000.00 5 Gross profit $569,600.00 $372,000.00 6 Selling expenses $142,400.00 $84,000.00 7 Administrative expenses 62,300.00 54,000.00 8 Total operating expenses $204,700.00 $138,000.00 9 Income from operations $364,900.00 $234,000.00 10 Other income 80,100.00 54,000.00 11 Income before income tax $445,000.00 $288,000.00 12 Income tax expense 231,400.00 156,000.00 13 Net income $213,600.00 $132,000.00

Answer 1

Indigo Company

Comparative Income Statement

For the Years Ended December 31, 2016 and 2015

	2016		2015
	Amount	%	Amount	%
Sales	890000	100.0%	600000	100.0%
Cost of goods Sold	320400	36.0%	228000	38.0%
Gross profit	569600	64.0%	372000	62.0%
Selling expenses	142400	16.0%	84000	14.0%
Administrative expenses	62300	7.0%	54000	9.0%
Total operating expenses	204700	23.0%	138000	23.0%
Income from operations	364900	41.0%	234000	39.0%
Other income	80100	9.0%	54000	9.0%
Income before income tax	445000	50.0%	288000	48.0%

To calculate percentage, the amount of each item of respective is year is divided by the sales of respective year

For example

Percentage of gross profit in 2016 = gross profit in 2016 / sales in 2016 = 569600/890000 = 64.0%

Percentage of gross profit in 2015 = gross profit in 2015 / sales in 2015 = 372000/600000 = 62.0%

In the same way it is calculated for all items for both years.