Exercise 2-50
Name:
Enter the appropriate amount in the gray-shaded cells.
A red asterisk (*) will appear in the column to the right of an incorrect amount.
Round percentages to the nearest tenth of a percent.
1.
Jasper Company
Income Statement
For the Last Year
Sales &
Percent
Expenses
of Sales
Sales revenue
$
3,360,000
100.0%
Cost of goods sold
795,000
23.7%
Gross profit
$
2,565,000
76.3%
Less:
Selling expense
437,000
13.0%
Administrative expense
854,000
25.4%
Operating income
$
1,274,000
37.9%
2.
Enter your essay answer in the space below. Essay answers will not be graded.
A manager could use this income statement to better control costs because the percentage
column clearly shows how much profit was lost due to costs and expenses, which the manager
can then use to compare to previous fiscal periods and make sure that the costs and expenses
are not increasing. It also helps the manager better see the impact any changes during the
period might have made and whether those changes helped raise profit or not.
