Common-Size and Forecast Income Statements Refer to the income statements for The Gap, Inc., presented in E5-34 below. a. Prepare common-size income statements for fiscal years 2019 (ending February 1, 2020) and 2018 (ending February 2, 2019). b. Prepare an income statement forecast for the fiscal year 2020 (ending January 30, 2021), based on the following assumptions: Net sales total $14,000 million. Cost of goods sold and occupancy expenses are 62% of sales. Operating expenses total 35% of sales. Interest income and interest expense are unchanged from the 2019 amounts. The Gap's effective tax rate on income before taxes is 25% in 2020. c. Given the Gap's business strategy, what are the factors that ultimately determine the accuracy of the income statement forecast prepared in b?

income statements for The Gap, Inc., presented in E5-34.

THE GAP, INC. THE GAP, INC. Selected Balance Sheet Data