Exercise 14-1 (Algo) Common-Size Income Statement [LO14-1) A comparative income statement is given below for McKenzie Sales, Limited, of Toronto: McKenzie Sales, Limited Comparative Income Statement This Year Last Year Sales $ 7,300,000 $ 5,548,000 Cost of goods sold 4,690,000 3,510,500 Gross margin 2,610,000 2,037,500 Selling and administrative expenses : Selling expenses 1,376,000 1,081,500 Administrative expenses 711,500 615,000 Total expenses 2,087,500 1,696,500 Net operating income 522,500 341,000 Interest expense 99,000 89,000 Net income before taxes $ 423,500 $ 252,000 Members of the company's board of directors are surprised to see that net income increased by only $171,500 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 (.e., 0.1234 should be entered as 12.3).) Answer is not complete. This Year 100.0 64.3 35.7 % % % Last Year 100.0 % 63.3 % 36.7 % de se Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total selling and administrative expenses Net operating income Interest expense Net income before taxes 19.5 11.1 SI % % % % 18.9 X % 9.8 % 28.7 % 7.0 % % 7.0 % 30.6 6.1 % 6.1 %