The following information was drawn from the records of Laufer Sales Company.

Required

a. Prepare a multistep income statement for each year.

b. Prepare a common size income statement for each year.

c. At a recent meeting of the stockholders, Laufer's president stated 2013 would be a very good year with net income rising significantly. Write a brief memo explaining whether you agree or disagree with the president. Assume that the operating trends between 2011 and 2012 continue through 2013 .

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Net sales Cost of goods sold Operating expenses Loss on the sale of land 2011 2012 $100,000 $100,000 (45,000) (40,000) (30,000) (25,000) -0- (12,000)