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Data for Gomez, Inc. and Alioto Corp. follow:

Data for Gomez, Inc. and Alioto Corp. follow: EEB (Click the icon to view the data.) Read the requirements Requirement 1. Prepare common-size income statements. (Round your answers to one decimal place, XX%.) Gomez Versus Alioto Common-Size Income Statement (Partial) Year Ended December 31 Gomez Alioto Net Sales Revenue Cost of Goods Sold Other Expenses Net Income

Gomez Alioto Net Sales Revenue Cost of Goods Sold Other Expenses Net Income $ 11,000 6,721 3,597 $ 682 $ 26,000 18,746 5,876 $ 1,378

1. Prepare common-size income statements. 2. Which company earns more net income? 3. Which companys net income is a higher percentage of its net sales revenue?

Requirements

1. Prepare common-size income statements.

2. Which company earns more net income?

3. Which company's net income is a higher percentage of its net sales revenue?

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Answer #1

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Gomez Alioto
Net sales revenue 11000 26000
Cost of goods sold 6721 18746
Other expenses 3597 5876
Net income 682 1378
answer 1 Common size statement
Gomez Alioto
Net sales revenue 100.0% =11000/11000 100.0% =26000/26000
Cost of goods sold 61.1% =6721/11000 72.1% =18746/26000
Other expenses 32.7% =3579/11000 22.6% =5876/26000
Net income 6.2% =682/11000 5.3% =1378/26000
answer 2 Alioto earn higher net income compared to Gomez
answer 3 Gomez has higher net income % compared to Alioto
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