Exercise 16-1 (Algo) Common-Size Income Statement (LO16-1) A comparative income statement is given below for Mckenzie Sales, Limited, of Toronto: Last Year $ 5,586,000 3,508,500 2,077,500 McKenzie Sales, Limited Comparative Income Statement This Year Sales $ 7,350,000 Cost of goods sold 4,770,000 Gross margin 2,580,000 Selling and administrative expenses : Selling expenses 1,391,000 Administrative expenses 703,000 Total expenses 2,094,000 Net operating income 486,000 Interest expense 97,000 Net income before taxes $ 389,000 1,079,000 609,500 1,688,500 389,000 86,000 $ 303,000 Members of the company's board of directors are surprised to see that net income increased by only $86,000 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 (i.e., 0.1234 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 % % % % % % % % % % % %