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Paul Sabin organized Sabin Electronics 10 years ago to produce and sell several electronic devices on which he had secured patents. Although the company has been fairly profitable, it is now experiencing a severe cash shortage. For this reason, it is requesting a $610,000 long-term loan from Gulfport State Bank, $155,000 of which will be used to bolster the Cash account and $455,000 of which will be used to modernize equipment. The company's financial statements for the two most recent years follow: Sabin Electronics Comparative Balance Sheet This Year Last Year $ 114,000 0 620,000 1,055,000 30,000 1,819,000 1,977,800 $ 3,796,800 $ 260,000 29,000 410,000 705,000 33,000 1,437,000 1,480,000 $ 2,917,000 Assets Current assets: Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Total current assets Plant and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 12% Total liabilities Stockholders' equity: Common stock, $15 par Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 855,000 800,000 1,655,000 $ 410,000 800,000 1,210,000 800,000 1,341,800 2,141,800 $ 3,796,800 800,000 907,000 1,707,000 $ 2,917,000 Sabin Electronics Comparative Income Statement and Reconciliation This Year Last Year Sales $ 5,550,000 $ 4,680,000 Cost of goods sold 3,985,000 3,560,000 Gross margin 1,565,000 1,120,000 Selling and administrative expenses 675,000 570,000 Net operating income 890,000 550,000 Interest expense 96,000 96,000 Net income before taxes 794,000 454,000 Income taxes (30%) 238, 200 136,200 Net income 555, 800 317,800 Common dividends 121,000 100,000 Net income retained 434,800 217,800 Beginning retained earnings 907,000 689,200 Ending retained earnings $ 1,341,800 $ 907,000 During the past year, the company introduced several new product lines and raised the selling prices on a number of old product lines in order to improve its profit margin. The company also hired a new sales manager, who has expanded sales into several new territories. Sales terms are 3/10, n/30. All sales are on account. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Present the income statement in common-size format down through net income for both this year and last year. (Round your answers to 1 decimal place.) Sabin Electronics Common-Size Income Statements This Year Last Year Sales % % 0.0 0.0 Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes 0.0 0.0 0.0 0.0 Income taxes Net income 0.0 % 0.0 %