Solution-Express each income statement component

Express each income statement component

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Reference no: EM13798006

Question 1:

Express each income statement component as a percentage of sales, and comment on the trends in each line from 2013 to 2014.

	2014	% Sales	2013	% Sales
Sales	$ 1,000,000		$ 1,200,000
Cost of goods sold	$ 450,000		$ 600,000
Gross margin	$ 550,000		$ 600,000
Operating expenses	$ 600,000		$ 450,000
Net income	$ (50,000)		$ 150,000

Question 2:

Compute (1) accounts receivable turnover for 2014, (2) the inventory turnover for 2014, and (3) the net margin for 2014.

	2014	2013

Accounts receivable	$ 380,000.00	$ 376,000.00
Allowance for doubtful accounts	$ (20,000.00)	$ (16,000.00)
Net accounts receivable	$ 360,000.00	$ 360,000.00

Inventory	$ 480,000.00	$ 440,000.00


Sales	$ 3,400,000.00	$ 3,080,000.00

Cost of goods sold	$ 1,600,000.00	$ 1,440,000.00

Operating expenses	$ 780,000.00	$ 680,000.00

Reference no: EM13798006

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Express each income statement component

Reference no: EM13798006

Reference no: EM13798006

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