The following percentages apply to Fanning Company for Year 3 and Year 4: Year 4 Year 3 Sales 100.0% 100.0% Cost of goods sold 60.9 63.8 Gross margin 39.1 36.2 Selling and administrative expense 26.6 20.6 Interest expense 2.7 2.0 Total expenses 29.3 22.6 Income before taxes 9.8 13.6 Income tax expense 5.6 7.2 Net income 4.2% 6.4% Required Assuming that sales were $515,000 in Year 3 and $585,000 in Year 4, prepare income statements for the two years. Sales Cost of goods sold FANNING COMPANY Income Statements Year 4 Year 3 Gross margin Selling and administrative expenses Interest expense Total expenses Income before taxes Income tax expense Net income 0 0 0 0