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A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: McKenzie Sales, Ltd. Comparative Income Statement This Year Last Year Sales $

A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto:

McKenzie Sales, Ltd. Comparative Income Statement
This Year Last Year
Sales $ 7,300,000 $ 5,548,000
Cost of goods sold 4,680,000 3,514,500
Gross margin 2,620,000 2,033,500
Selling and administrative expenses:
Selling expenses 1,392,000 1,076,000
Administrative expenses 707,000 612,500
Total expenses 2,099,000 1,688,500
Net operating income 521,000 345,000
Interest expense 101,000 92,000
Net income before taxes $ 420,000 $ 253,000

Members of the companys board of directors are surprised to see that net income increased by only $167,000 when sales increased by $1,752,000.

Required:

1. Express each year's income statement in common-size percentages. (Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)

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This Year 100.0 % Last Year 100.0 % Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses 100.0 % 100.0 % Administrative expenses 0.0 % 100.0 % 0.0 100.0 % Total selling and administrative expenses Net operating income Interest expense Net income before taxes 100.0 % 100.0 %

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