Answer:
Net Income for the year is $145,800 (28% as percentage of Sales)
Explanation:
Income Common Size
Statement Income Statement
Sales Revenue $525,000 100%
Less: Cost of Goods Sold $(200,000) 38%
Gross Profit $325,000 62%
Less expenses:
General & Administrative Expenses $(62,000) 12%
Depreciation $(8,000) 2%
Earnings before Interest & Taxes (EBIT) $255,000 49%
Less: Interest Expense $(12,000) 2%
Earnings before Tax (EBT) $243,000 46%
Less: Income Tax Expense $(97,200) 19%
Net Income $145,800 28%
Common Size income statement is the one where each line item of the company's income statement is expressed as percentage of Sales Revenue.
Please note that:
