Net sales $10,000,000 $8,000,000 $6,500,000\ Less: Cost of goods sold 6,000,000 5,500,000 5,000,000\ Gross margin $4,000,000 $2,500,000 $1,500,000\ Less: Operating expenses 2,200,000 1,300,000 450,000\ Income taxes 720,000 480,000 420,000\ Net income $1,080,000 $720,000 $630,000\ Required:\ \ Prepare common-size income statements by using net sales as the base. Round answers to the nearest whole percentage.\ \ Azita Company\ Income Statement\ \ Line Item Description Year 1 dollars Year 1 percent Year 2 dollars Year 2 percent Year 3 dollars Year 3 percent\ \ Net sales\ $Net sales\ 10,000,000\ Net sales\ 100\ % $Net sales\ 8,000,000\ Net sales\ % $Net sales\ 6,500,000\ Net sales\ %\ \ Less: Cost of goods sold\ Less: Cost of goods sold\ 6,000,000\ Less: Cost of goods sold\ 60\ Less: Cost of goods sold\ 5,500,000\ Less: Cost of goods sold\ Less: Cost of goods sold\ 5,000,000\ Less: Cost of goods sold\ \ Gross margin\ $Gross margin\ 4,000,000\ Gross margin\ 40\ $Gross margin\ 2,500,000\ Gross margin\ $Gross margin\ 1,500,000\ Gross margin\ \ Less: Operating expenses\ Less: Operating expenses\ 2,200,000\ Less: Operating expenses\ 22\ Less: Operating expenses\ 1,300,000\ Less: Operating expenses\ Less: Operating expenses\ 450,000\ Less: Operating expenses\ \ Income taxes\ Income taxes\ 720,000\ Income taxes\ Income taxes\ 480,000\ Income taxes\ Income taxes\ 420,000\ Income taxes\ \ Net income\ $Net income\ 1,080,000\ Net income\ $Net income\ 720,000\ Net income\ $Net income\ 630,000