毕晓方改编+《财务会计》的课后习题答案章习题答案.doc

EXERCISES Ex. 17–1 a. HOME-MATE APPLIANCE CO. Comparative Income Statement For the Years Ended December 31, 2006 and 2005 2006 2005 Amount Percent Amount Percent Sales $500,000 100.0% $450,000 100.0% Cost of goods sold 275,000 55.0 234,000 52.0 Gross profit $225,000 45.0% $216,000 48.0% Selling expenses $ 90,000 18.0% $ 94,500 21.0% Administrative expenses 60,000 12.0 63,000 14.0 Total operating expenses $150,000 30.0% $157,500 35.0% Income from operations $ 75,000 15.0% $ 58,500 13.0% Income tax expense 25,000 5.0 22,500 5.0 Net income $ 50,000 10.0% $ 36,000 8.0% b. The vertical analysis indicates that the cost of goods sold as a percent of sales increased by 3 percentage points (55% – 52%) between 2005 and 2006. However, the selling expenses and administrative expenses improved by 5 percentage points. Thus, the net income as a percent of sales improved by 2 percentage points. Ex. 17–2 a. HORIZON PUBLISHING COMPANY Common-Size Income Statement For the Year Ended December 31, 20— Horizon Publishing Publishing Industry Company Average Amount Percent Sales $ 1,414,000 101.0% 101.0% Sales returns and allowances 14,000 1.0 1.0 Net sales $ 1,400,000 100.0% 100.0% Cost of goods sold 504,000 36.0 40.0 Gross profit $ 896,000 64.0% 60.0% Selling expenses $ 574,000 41.0% 39.0% Administrative expenses 154,000 11.0 10.5 Total operating expenses $ 728,000 52.0% 49.5% Operating income $ 168,000 12.0% 10.5% Other income 16,800 1.2 1.2 $ 184,800 13.2% 11.7% Other expense 23,800 1.7 1.7 Income before income tax $ 161,000 11.5% 10.0% Income tax expense 56,000 4.0 4.0 Net income $ 105,000 7.5% 6.0% b. The cost of goods sold is 4 percentage points lower than the industry average, but the selling expenses and administrative expenses are 2.5 percentage points higher than the industry average. The combined impact is for net income as a percent of sales to be 1.5 perce