Prepare a condensed income statement for 2023 assuming both sets of proposed chsnges are made

Three years ago, Karen Suez and her brother-in-law Reece Jones opened Cullumber Department Store For the first 2 years, business was good, but the following condensed income statement results for 2022 were disappointing. CULLUMBER DEPARTMENT STORE Income Statement For the Year Ended December 31, 2022 Net sales $760,000 Cost of goods sold 608,000 Gross profit 152,000 Operating expenses Selling expenses Administrative expenses $96,000 20,000 116,000 Net income $36,000 Karen believes the problem lies in the relatively low gross profit rate of 20%. Reece believes the problem is that operating expenses are too high Karen thinks the gross profit rate can be improved by making two changes. She does not anticipate that these changes will have any effect on operating expenses. 1. Increase average selling prices by 15%; this increase is expected to lower sales volume so that total sales dollars will increase only 4% 2. Buy merchandise in larger quantities and take all purchase discounts. These changes to selling price and purchasing practices are expected to increase the gross profit rate from its current rate of 20% to a new rate of 25%. Reece thinks expenses can be cut by making these two changes. He feels that these changes will not have any effect on net ales. 1. Cut 2023 sales salaries of $66,000 in half and give sales personnel a commission of 2% of net sales. 2. Reduce store deliveries to one day per week rather than twice a week. This change will reduce 2023 delivery expenses of $43,000 by 40% Karen and Reece come to you for help in deciding the best way to improve net income Answer the following Prepare a condensed income statement for 2023 assuming both sets of proposed changes are made. CULLUMBER DEPARTMENT STORE Projected Income Statement For the Year Ended December 31, 2023 Net sales $ Cost of goods sold Gross profit Operating expenses Selling expenses $ Administrative expenses Total operating expenses Net income