Exercise 16-1 (Algo) Common-Size Income Statement [LO16-1] A comparative income statement is given below for McKenzie Sales, Limited, of Toronto: McKenzie Sales, Limited Comparative Income Statement This Year Sales Cost of goods sold Gross margin $7,350,000 4,640,000 2,710,000 Selling and administrative expenses: Selling expenses 1,374,000 Last Year $ 5,586,000. 3,515,500 2,070,500 1,075,000 Administrative expense Total expenses 2,081,000 Net operating income Interest expense Net income before taxes 707,000 617,500 1,692,500 629,000. 378,000 104,000 $525,000 86,000 $292,000 Members of the company's board of directors are surprised to see that net income increased by only $233,000 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).) Answer is complete but not entirely correct. Sales Cost of goods sold i Gross margin This Year 100.0% Last Year 100.0 % 63.3% 62.90 % 36.7 % 37.1 %