Exercise 16-1 (Algo) Common-Size Income Statement (L016-1) A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: McKenzie Sales, Ltd. Comparative Income Statement This Year Sales $7,350,000 Cost of goods sold 4.730.000 Gross margin 2.620,000 Selling and administrative expenses Selling expenses 1,392,000 Administrative expenses 703,000 Total expenses 2,095,000 Not operating income 525,000 Interest expense 105,000 Net Income before taxes 420,000 Last Year $5,586,000 3.506,500 2,079,500 1,074,500 612,500 1.682,000 392,500 94.000 $ 298,500 Members of the company's board of directors are surprised to see that net income increased by only $121,500 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 lie.. 0.1234 should be entered as 12.3).) This Year Sales Last Year % % 96 % Cost of goods sold Gross margin Selling and administrative expenses Selling expenses Administrative expenses Total selling and administrative expenses 9 % % Selling and administrative expenses : Selling expenses Administrative expenses Total expenses Net operating income Interest expense Not income before taxes 1,392,000 703,000 2.095.000 525,000 105,000 $ 420,000 1,074,500 612,500 1.687.000 392,500 94.000 $ 298,500 Members of the company's board of directors are surprised to see that net income increased by only $121,500 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 (ie. 01234 should be entered as 12.3).) This Year Last Year % % % 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 % % % % % % % % % %