Exercise 14.3 (Algo) Common Size Income Statements (LO14-1) Sales Year 1 $414,000 Year 21 $492,000 Cost of goods sold Gross profit 330,000 $ 162,000 130,000 $ 32,000 $ 30,000 Operating expenses Net income 268,000 $146,000 116,000 a. Prepare common size income statements for Price Company, a sole proprietorship, for the two years shown as above by converting the dollar amounts into percentages. For each year, sales will appear as 100 percent and other items will be expressed as a percentage of sales. (Income taxes are not involved as the business is not incorporated.) b. State whether the changes from year 1 to year 2 are favorable or unfavorable. Complete this question by entering your answers in the tabs below. Required A Required B State whether the changes from year 1 to year 2 are favorable or unfavorable. Sales Gross Profit Exercise 14.3 (Algo) Common Size Income Statements (LO14-1) Year 2 Sales Cost of goods sold Gross profit $492,000 330,000 Operating expenses Net income $ 162,000 130,000 $ 32,000 Year 1 $414,000 268,000 $146,000 116,000 $ 30,000 a. Prepare common size income statements for Price Company, a sole proprietorship, for the two years shown as above by converting the dollar amounts into percentages. For each year, sales will appear as 100 percent and other items will be expressed as a percentage of sales. (Income taxes are not involved as the business is not incorporated.) b. State whether the changes from year 1 to year 2 are favorable or unfavorable. Complete this question by entering your answers in the tabs below. Required A Required B Prepare common size income statements for Price Company, a sole proprietorship, for the two years shown as above by converting the dollar amounts into percentages. For each year, sales will appear as 100 percent and other items will be expressed as a percentage of sales. (Income taxes are not involved as the business is not incorporated.) (Round your percentage value answers to 2 decimal places. I.e. 0.1234 as 12.34%.) Sales Cost of goods sold Gross profit Operating expenses Net income Year 2 Year 1 % % % % % % % % % % Required A Required B > Show less A