Prepare a Comparative Common-Size Income Statement for Clarion, Inc Operating Expenses

question 89

Essay

Prepare a comparative common-size income statement for Clarion, Inc. for 2019 and 2018 data. (Round percentages to one decimal place.)
Clarion, Inc.
Comparative Income Statement
Years Ended December 31,2019 and 2018 $\begin{array}{llr}&\underline{2019}&\underline{2018}\\\text { Net Sales } & \$ 6,355 & \$ 4,920 \\\text { Cost of Goods Sold } & \underline{3,370} & \underline{2,200} \\\text { Gross Profit } &2,985& 2,720\end{array}$ Operating Expenses:
$$\begin{array} { l l l } \text { Selling Expenses } & 675 & 580 \\\text { Administrative Expenses } & \underline { 410 } & \underline { 425 } \\\text { Total Operating Expenses } & \underline { 1,085 } & \underline { 1,005 } \\\text { Operating Income } & 1,900 & 1,715\end{array}$$ Other Income and (Expenses):
$\begin{array}{lll}\text { Interest Expense } & \underline{(400)}& \underline{(695)} \\\text { Total Other Income and (Expenses) } & \underline{(400)}& \underline{(695)} \\\text { Income Before Income Taxes } & 1,500 & 1,020\\\text { Income Tax Expense } & \underline{230}& \underline{210}\\ \text { Net Income } & \underline{\$1,270}& \underline{\$810}\end{array}$

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Definitions:

Ordinary Annuity

A sequence of identical payments that are distributed at consistent intervals, where the initial payment is made at the conclusion of the period.

RRSP

Registered Retirement Savings Plan, a retirement savings and investment account for holding savings and investment assets, recognized by the Canadian government.

Month-end Contributions

Payments or deposits made towards an investment or savings plan at the end of each month.

Compounded Monthly

Interest that is calculated and added to the principal balance once a month.