The following percentages apply to Rooney Company for Year 3 and Year 4:

	Year 4	Year 3
Sales	100.0 %	100.0 %
Cost of goods sold	61.1	64.1
Gross margin	38.9	35.9
Selling and administrative expense	26.2	20.5
Interest expense	2.4	1.9
Total expenses	28.6	22.4
Income before taxes	10.3	13.5
Income tax expense	5.3	7.0
Net income	5.0 %	6.5 %

Required

Assuming that sales were $505,000 in Year 3 and $600,000 in Year 4, prepare income statements for the two years.

The following percentages apply to Rooney Company for Year 3 and Year 4: Assuming that sales were $505,000 in Year 3 and $600,000 in Year 4, prepare income statements for the two years