Using the Income Statement Below, Develop a Common-Size Statement by Filling

question 81

Essay

Using the income statement below, develop a common-size statement by filling in the blanks provided. Show your work. Round to one decimal place.
$\begin{array}{|l|l|l|}\hline & 20 x x & 20 x x \\\hline & & \\\hline \text { Net sales } & \$ 780,000 & \\\hline \text { Cost of goods sold } & 452,400 & \\\hline \text { Grossimargin } & \$ 327,600 & \\\hline \text { Operating expenses } & 156,000 & \\\hline \text { Income before income taxes } & \$ 171,600 & \\\hline \text { Income taxes expense } & 124,800 & \\\hline \text { Net income } & \$ 46,800 & \\\hline & & \\\hline\end{array}$

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Definitions:

Sarbanes-Oxley Act

A U.S. law enacted in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to securities laws.

Auditing

The systematic examination and evaluation of the financial statements of an organization to ensure that records are accurate and fair, performed by an internal or external auditor.

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Rules set forth by the federal government to determine the recommended punishment for individuals and organizations convicted of felonies and serious misdemeanors.

Self-Regulation

The ability of an individual or organization to regulate its actions and behaviors without external control, often to maintain ethical standards.