Exercise 135 Determination of income effects from commonsize

Exercise 13-5 Determination of income effects from common-size and trend percents LO P1, P2 Common-size and trend percents for Rustynail Company\'s sales, cost of goods sold, and expenses follow Trend Percents Common-Size Percents 2015 2014 2013 2015 2014 2013 100.0% 100.0% 100.0% 100.0% 104.8% 103.6% Sales Cost of goods sold Total expenses 63.5 61.3 58.0 114.7 109.5 100.0 14.4 13.9 14.2 106.4 101.4 100.0 Determine the net income for the following years. (Enter all amounts as positive values. Round your answers to nearest whole dollar.) 2015 2014 2013 Sales Cost of Goods Sold Total Expenses Net Income 100,000 58,000 4,200 $ 27,800 Did the net income Increase, decrease, or remain unchanged in this three-year period? Net income decreased Net income increased Remained unchanged

Solution

So as per the figures, the NET INCOME HAS DECREASED.

Common Size Percent					Trend Percent
	2,015.00	2,014.00	2,013.00			2,015.00	2,014.00	2,013.00
Sales	1,04,800.00	1,03,600.00	1,00,000.00		Sales	1,04,800.00	1,03,600.00	1,00,000.00
Cost Of Goods Sold	66,548.00	63,506.80	58,000.00		Cost Of Goods Sold	66,526.00	63,510.00	58,000.00
Total Expenses	15,091.20	14,400.40	14,200.00		Total Expenses	15,108.80	14,398.80	14,200.00
Net Income	23,160.80	25,692.80	27,800.00		Net Income	23,165.20	25,691.20	27,800.00