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	$4,000,000			100.0	%
Cost of goods sold	2,120,000			60.0
Gross profit	$1,880,000			40.0	%
Selling expenses	$1,080,000			24.0	%
Administrative expenses	640,000			14.0
Total operating expenses	$1,720,000			38.0	%
Operating income	$160,000			2.0	%
Other revenue	120,000			3.0
	$280,000			5.0	%
Other expense	80,000			2.0
Income before income tax	$200,000			3.0	%
Income tax expense	80,000			2.0
Net income	$120,000			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

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

Particulars	Tannenhill Company(A)	Electranic industry average(B)	Resulted Figures(A*B) (Common sized income statement)
Sales	$4,000,000	100%	$4,000,000
Cost of goods sold	$2,120,000	60%	$1,272,000
Gross profit	$1,880,000	40%	$752,000
Selling expense	$1,080,000	24%	$259,200
Administrative expense	$640,000	14%	$89,600
Total operating expense	$1,720,000	38%	$653,600
Operating income	$160,000	2%	$3,200
Other revenue	$120,000	3%	$3,600
	$280,000	5%	$14,000
other expense	$80,000	2%	$1,600
Income before income tax	$200,000	3%	$6,000
Income tax expense	$80,000	2%	$1,600
Net income	$120,000	1%	$1,200