Exercise 14-1 Common-Size Income Statement (LO14-1) Reu A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: McKenzie Sales, Ltd. Comparative Income Statement This Year Sales $7,340,000 Cost of goods sold 4.700,000 Gross margin 2,640,000 Selling and administrative expenses Selling expenses 1,385,000 Administrative expenses 711,500 Total expenses 2.096.500 Net operating income 543,500 Interest expense 101.000 Net Income before taxes $ 442,500 Last Year $5,578,400 1.511,500 2,066,900 1,073,000 611,500 1,684,500 382,400 91.000 $ 291,400 Members of the company's board of directors are surprised to see that net income increased by only $151,100 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 (ie. 0.1234 should be entered as 12.3).) Answer is complete but not entirely correct. Sales Cost of goods sold Gross margin This Year 100.0 65.1% 34.9 % Last Year 100.0% 65.1% 34.9 MacBook Air Net Income before taxes 343,00 101,000 $ 442,500 382,400 91.000 $ 291,400 Members of the company's board of directors are surprised to see that net income increased by only $151100 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 (... 0.1234 should be entered as 12.3).) Answer is complete but not entirely correct. This Year 100.0 % 65.1% 34.9 % Last Year 100.0 % 65.1% 34.9 % 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 18.7% 9.6 % 28.3 % 6.6 % 1.3 %% 5.3 % 18.7 % 9.6 % 28.3 % % 13 % 5.3 % 6.6 MacBook Air