Exercise 14-1 Common-Size Income Statement [LO14-1]

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

McKenzie Sales, Ltd. Comparative Income Statement
	This Year			Last Year
Sales	$	7,340,000		$	5,578,400
Cost of goods sold		4,700,000			3,515,500
Gross margin		2,640,000			2,062,900
Selling and administrative expenses:
Selling expenses		1,394,000			1,073,000
Administrative expenses		710,500			610,000
Total expenses		2,104,500			1,683,000
Net operating income		535,500			379,900
Interest expense		104,000			85,000
Net income before taxes	$	431,500		$	294,900

Members of the companys board of directors are surprised to see that net income increased by only $136,600 when sales increased by $1,761,600.

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).)