The income statements that follow are for Loury Hardware Corporation.

Required 1. From the information provided, prepare a multistep income statement for 20x7 and 20x8 showing percentages of net sales for each component.
2. User Insight: Did income from operations increase or decrease from 20x7 to 20x8? Write a short explanation of why this change occurred.
3. User Insight: What effect did other revenues and expenses have on the change in income before income taxes? What action by Loury Hardware’s management probably accounted for this change?
Liquidity and Profitability

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Loury Hardware Corporation Income Statements For the Years Ended July 31, 20x8 and 20x7 20x8 20x7 Revenues Net sales Interest income Total revenues $464,200 $388,466 420 500 $464,620 $388,966 Costs and expenses Cost of goods sold $243,880 $198,788 Selling expenses 95,160 55,644 General and administrative expenses 90,840 49,286 Interest expense 5,600 1,100 Total costs and expenses $435,480 $304,818 Income before income taxes $ 29,140 $ 84,148 Income taxes 7,000 21,000 Net income $ 22,140 $ 63,148 Earnings per share $ 2.21 $ 6.31