Furto 2 Exercise 14-1 Common-Size Income Statement [LO14-1) 1.66 A comparative income statement is given below for McKenzie Sales, Ltd. of Toronto McKenzie Sales, Ltd. Comparative Income Statenent This Year Last Year Sales $7,350,000 55,516,000 Cost of goods sold 4,710,000 3,511.000 Gross margin 2,640,000 Setting and administrative expenses Selling expenses 1.399,000 1,272, Administrative expenses 706,000 615,500 Total expenses 2,105, 2,687,500 Net operating income 535,00 18 Interest expense 105,000 85, Net Incone before taxes $430,000 302.500 Members of the company's board of directors are surprised to see that net income increased by only $127.500 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 (i... 0.1234 should be entered as 12,3).) Answer is complete but not entirely correct. Sales Cost of goods sold Gross margin Sling and administrative expenses Selling expenses This Year 1000 5S 365 Last Year 1000% 20 371 18.7 19.4 Seunang expenses Administrative expenses Total expenses Net operating income Interest expense Net income before taxes 1,399, 786,000 2,185,00 535,800 105,000 $430,000 1,072, 615,500 1,687,500 387,588 85,000 $ 302,500 Members of the company's board of directors are surprised to see that net income increased by only $127,500 when sales Increased by $1764,000 Required: 1. Express each year's income statement in common-size percentages. (Round your percentage answers to 1 decimal place (le 0.1234 should be entered as 12.3).) Answer is complete but not entirely correct. This Year 100.0% 63.5 % 355 % Last Year 1000% 629 371 Sales Cost of goods sold Gross margin Selling and administrative expenses Selling expenses Administrative expenses Total selling and administrative penses Net operating income Interest expense Net income before the 18.7% 9.01 28.3 % 8.2 * 14% % 194% 110% 304 % 6.7 1.73 5.1 % 68