Morrisey & Brown, Ltd., of Sydney, Australia, is a merchandising firm that is the sole distributor of a product that is increasing in popularity among Australian consumers. The company's income statements for the three most recent months follow: Sales in units Sales revenue Less: Cost of goods sold Gross margin MORRISEY & BROWN, LTD. Income Statements For the Four Quarters Ending December 31 Less: Operating expenses: Advertising expense Shipping expense Salaries and commissions Insurance expense Depreciation expense Total operating expenses Net income Quarter 1 4,700 Quarter 2 4,200 Quarter 3 Quarter 4 5,240 4,800 A$470,000 A$420,000 A$524,000 A$480,000 282,000 252,000 314,400 288,000 188,000 168,000 209,600 192,000 21,200 21,200 21,200 21.200 34,800 36,800 40,960 36,760 79,200 78,400 90,880 86,160 6,200 6,200 6,200 6,200 15,200 15,200 15,200 15,200 156,600 157,800 174,440 165,520 A$ 31,400 A$ 10,200 A$ 35,160 A$ 26,480 (Note: Morrisey & Brown, Ltd.'s Australian-formatted income statement has been recast into the format common in Canada. The Australian dollar is denoted by A$.)