Preparing Common-Size Income Statements by Using Base Period Horizontal Analysis Jasmine Company provided the following income statements for its first 3 years of operation: Year 1 Year 2 Year 3 Net sales $5,000,000 $4,500,000 $4,000,000 Less: Cost of goods sold Gross margin (3,000,000) (3,250,000) (3,600,000) $2,000,000 $1,250,000 $400,000 Less: Operating expenses (1,420,000) (800,000) (165,000) Income taxes (232,000) (180,000) (134,000) Net income $348,000 $270,000 $101,000