Answer:
Explanation:
Jeter Versus Verde
Common-size income statements (Partial)
Year Ended December 31
Particulars Jeter Verde
Net sales Revenue 100% 100%
Cost of Good sold 60.9% 73.4%
Other expenses 32.9% 21.7%
Net income 6.2% 4.9%
The workings are shown below
Particulars Jeter Verde
Net sales Revenue $8,000 $19,000
Cost of Good sold $4,872 $13,946
Other expenses $2,632 $4,123
Net income $496 $931
The percentage is
= Items ÷ revenues × 100
For cost of goods sold for Jeter, it would be
= ($4,872 ÷ $8,000) × 100
= 60.9%
The same formula is applied for other items also.
