Prepare common size income statements

Question

		2011			2010
Sales	$	511,000		$	413,000
Cost of goods sold		330,000			268,000
Gross profit	$	181,000		$	145,000
Operating expenses		130,000			116,000
Net income	$	51,000		$	29,000

  

Prepare common size income statements for Pellum Company, a sole proprietorship, for the two years shown above by converting the dollar amounts into percentages. For each year, sales will appear as 100 percent and other items will be expressed as a percentage of sales.

  

	2011		2010
Sales	100%		100%
Cost of goods sold	%		%
Gross profit	%		%
Operating expenses	%		%
Net income	%		%