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Question(s) / Instruction(s):

A comparative income statement is given below for Ryder Company:

Ryder Company

Comparative Income Statement

                                                                                This Year                              Last Year  

  Sales                                                                    $5,000,000                          $4,000,000          

  Cost of goods sold                                        3,160,000                             2,400,000           

  Gross margin                                                  1,840,000                             1,600,000           

  Selling and administrative expenses:                                                                                    

      Selling expenses                                       900,000                 700,000               

      Administrative expenses                       680,000                 584,000               

  Total selling and administrative expenses                         

1,580,000                             1,284,000           

  Net operating income                                 260,000                 316,000               

  Interest expense                                          70,000                                  40,000  

  Net income before taxes                           $ 190,000                            $276,000             

     The president is concerned that net income is down even though sales have increased during the year. The president is also concerned that administrative expenses have increased because the company made a concerted effort to cut waste out of the organization.

Required:

Express each year's income statement in common-size percentages.

 

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