Question

The following percentages apply to Thornton Company for 2018 and 2019: points 2018 100.0% 63.9 36.1 20.3 Skipped Sales Cost of goods sold Gross margin Selling and administrative expense Interest expense Total expenses Income before taxes Income tax expense Net income 2019 100.0% 60. 9 39.1 26.4 2.4 28.8 10.3 5.5 4.8% 22.1 14.0 6.8 7.2% eBook Print Required Assuming that sales were $505,000 in 2018 and $585,000 in 2019, prepare income statements for the two years. References 2018 THORNTON COMPANY Income Statements 2019 Sales Cost of goods sold Gross margin Selling and administrative expenses Interest expense Total expenses Income before taxes Income tax expense Net income

Answer 1

THORNTON COMPANY
Income Statements
	2019		2018
Sales	100.0%	$ 585000	100.0%	$ 505000
Costs of goods sold	60.9	$ 356265	63.9	$ 322695
Gross Margin	39.1	$ 228735	36.1	$ 182305
Selling and administrative expenses	26.4	$ 154440	20.3	$ 102515
Interest Expenses	2.4	$ 14040	1.8	$ 9090
Total Expenses	28.8	$ 168480	22.1	$ 111605
Income before taxes	10.3	$ 60255	14.0	$ 70700
Income tax expense	5.5	$ 32175	6.8	$ 34340
Net Income	4.8%	$ 28080	7.2%	$ 36360