Scherer Company provided the following income statements for its first 3 years of operation:

Scherer Company

Income Statements

Years of Operation

1		Year 1	Year 2	Year 3
2	Net sales	$1,090,000.00	$1,199,000.00	$1,417,000.00
3	Less: Cost of goods sold	292,000.00	308,000.00	368,000.00
4	Gross margin	$798,000.00	$891,000.00	$1,049,000.00
5	Less:
6	Operating expenses	417,000.00	489,000.00	589,500.00
7	Income taxes	110,000.00	119,400.00	140,600.00
8	Net income	$271,000.00	$282,600.00	$318,900.00

	Required:
	Prepare common-size income statements by using net sales as the base.

Refer to the list below for the exact wording of an account title within your income statement.

Labels
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Amount Descriptions
Add contribution margin
Cost of goods sold
Gross margin
Income taxes
Less contribution margin
Net income
Net loss
Net sales
Operating Expenses

1		Year 1	Year 1	Year 2	Year 2	Year 3	Year 3
2		Dollars	Percentages	Dollars	Percentages	Dollars	Percentages
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