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 Sales Cost of goods sold Gross margin This Year $ 7,350,000 4,750,000 2,600,000 Last Year $ 5,586,000 3,510,500 2,075,500 Selling and administrative expenses: 1,393,000 1,073,000 709,000 608,500 2,102,000 1,681,500 498,000 97,000 $ 401,000 394,000 Selling expenses Administrative expenses Total expenses Net operating income Interest expense Net income before taxes 85,000 $ 309,000 Members of the company's board of directors are surprised to see that net income increased by only $92,000 when sales increased by $1,764,000. Required: 1. Express each year's income statement in common-size percentages. (Round your percentage answers to 1 decimal place (l.e., 0.1234 should be entered as 12.3).) This Year Last Year Sales % Cost of goods sold % % Gross margin 0.0 % 0.0 % Selling and administrative expenses: Selling expenses % % Administrative expenses Total selling and administrative expenses % % 0.0 % 0.0 % Net operating income Interest expense Net income before taxes 0.0 % 0.0 % % % 0.0 % 0.0 %