The following information is taken from the financial statements of Clybourn Company for the current year: $\begin{array}{lr}
\text { Current Assets } & \$ 32,000 \
\text { Total Assets } & 1,424,000 \
\text { Cost of Goods Sold } & 1,040,000 \
\text { Gross Profit } & 320,000 \
\text { Net Income } & 192,000
\end{array}$ On a common size income statement for this year,what is the percentage that would be shown next to the dollar amount of cost of goods sold?
A)76%
B)24%
C)31%
D)18%

Question

Quizplus · Accepted Answer

To calculate the percentage of Cost of Goods Sold (COGS) on a common size income statement, divide COGS by total revenue (Gross Profit + COGS) and multiply by 100. Here, COGS is $1,040,000 and Gross Profit is $320,000, making total revenue $1,360,000. So, ($1,040,000 / $1,360,000) * 100 = 76%.

The Following Information Is Taken from the Financial Statements of Clybourn