Net sales Cost of goods sold Gross margin Less: Operating expense Selling and administrative expenses Net income All dollar amounts are reported in thousands. Year 2 $ 426,500 (312,000) 114,500 (50,200) Year 3 $520,600 (369,600) 151,000 (64,800) $ 64,300 $ 86,200 The president's message in the company's annual report stated that the company had implemented a strategy to increase market share by spending more on advertising. The president indicated that prices held steady and sales grew as expected. Prepare common size income statements and make appropriate references to the differences between Year 2 and Year 3. (Round your final answers for percentage values to 1 decimal place. Enter dollar amounts in thousands, not in whole dollars.) Answer is complete but not entirely correct. TONER SALES COMPANY Income Statement For the Years Ended December 31, Year 2 and Year 3 Net sales Cost of goods sold Gross margin Operating expenses Operating income Year 2 Year 3 $420,500 100.0% $520,600) 100.0 % 312,000 73.1 369,600 71.0 114,500 269 151,000 29.0 50,200 11.8 64,800 12.4 x $ 64,300 15.1 % $ 86,2001 166%