Montana Company reported the following operating results for Year 1 and Year 2: $\begin{array}{|l|l|l|}
\hline 2013 & \text { Amount }&\% \text { of Sales }\
\hline \text { Sales } & \underline {\$ 800,000} \
\hline \text { Cost of goods sold } & \underline {440,000} \
\hline \text { Gross margin } & 360,000 \
\hline \text { Operating expenses } & \underline {225,000} \
\hline \text { Income before taxes } &135,000 \
\hline \text { Income taxes } & \underline { 40,000 } \
\hline \text { Net income } & \underline { \$ 95,000} \
\hline
\end{array}$

Question

Montana Company reported the following operating results for Year 1 and Year 2: $\begin{array}{|l|l|l|}
\hline 2013 & \text { Amount }&\% \text { of Sales }\
\hline \text { Sales } & \underline {\$ 800,000} \
\hline \text { Cost of goods sold } & \underline {440,000} \
\hline \text { Gross margin } & 360,000  \
\hline \text { Operating expenses } & \underline {225,000} \
\hline \text { Income before taxes } &135,000 \
\hline \text { Income taxes } & \underline { 40,000 } \
\hline \text { Net income } & \underline { \$ 95,000} \
\hline
\end{array}$

Quizplus · Accepted Answer

The Answer of Montana Company reported the following operating results for Year 1 and Year 2: $\begin{array}{|l|l|l|}
\hline 2013 & \text { Amount }&\% \text { of Sales }\
\hline \text { Sales } & \underline {\$ 800,000} \
\hline \text { Cost of goods sold } & \underline {440,000} \
\hline \text { Gross margin } & 360,000  \
\hline \text { Operating expenses } & \underline {225,000} \
\hline \text { Income before taxes } &135,000 \
\hline \text { Income taxes } & \underline { 40,000 } \
\hline \text { Net income } & \underline { \$ 95,000} \
\hline
\end{array}$

Montana Company Reported the Following Operating Results for Year 1