A Company Reports the Following Comparative Income Statements What Are the Costs of Goods Sold in Common-Size Percents

question 3

Essay

A company reports the following comparative income statements:
$\begin{array}{|l|r|r|}\hline&2011&2010\\\hline \text { Net sales } & \$ 736,000 & \$ 840,000 \\\hline \text { Cost of goods sold } & 518,880 & 571,200 \\\hline \text { Gross profit } & \$ 217,120 & \$ 268,800 \\\hline \text { Operating expenses } & 104,800 & 130,000 \\\hline \text { Net income } & \$ 112,320 & \$ 138,800 \\\hline\end{array}$
What are the costs of goods sold in common-size percents for 2010 and 2011,respectively?

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Definitions:

Interest Receipt

Interest Receipts are amounts received by an individual or a company as interest from investments, loans given, or savings.

Market Rate

The prevailing interest rate available in the market for loans or the return on investment securities.

Preferred Shares

Preferred shares are a type of equity security that typically provide dividends and asset liquidation preference over common shares but usually do not carry voting rights.

Common Shares

Equity securities that represent ownership in a corporation, giving holders voting rights and a share in the company’s profits through dividends.