Presented Are the Income Statements of Haley and Johnston Publications

question 107

Multiple Choice

Presented are the income statements of Haley and Johnston Publications companies for the current year: $\begin{array}{|l|l|l|l|l|}\hline & \text { Haley } & & \text { Johnston } & \\\hline \text { Net sales revenue } & \$ 487,000 & 100.00 \% & \$ 500,000 & 100.00 \% \\\hline \text { COGS } & 400,000 & 82.14 \% & 395,000 & 79.00 \% \\\hline \text { Gross Profit } & 87,000 & 17.86 \% & 105,000 & 21.00 \% \\\hline \text { Selling/Gen Expenses } & \underline{30,000} & 6.16 \% & 50,000 & 10.00 \% \\\hline \text { Income from operations } & 57,000 & 11.70 \% & 55,000 & 11.00 \% \\\hline \text { Income tax expense } & 17,100 & 3.51 \% & 16,500 & 3.30 \% \\\hline \text { Net Income } & \$ 39,900 & 8.19 \% & \$ 38,500 & 7.70 \% \\\hline\end{array}$

- Which company has the better relationship between net income and net sales revenue?

• A)Impossible to determine
• B)Both have the same relationship
• C)Johnston
• D)Haley

---

Definitions:

Creativity

The ability to produce original and valuable ideas or solutions to problems through imaginative thinking and innovation.

Intelligence

The ability to acquire knowledge, understand complex ideas, adapt to environments, learn from experiences, and apply reasoning in problem-solving.

Relationship

The way in which two or more people or things are connected, or the state of being connected.

Convergent Thinking

A thought process that narrows in on a single, correct solution to a problem, emphasizing analytical and logical reasoning.