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The following percentages apply to Stuart Company for Year 3 and Year 4: Year 4 Year 3 Sales 100.0 % 100.0 % Cost of goods
The following percentages apply to Stuart Company for Year 3 and Year 4:
Year 4 | Year 3 | ||||||
Sales | 100.0 | % | 100.0 | % | |||
Cost of goods sold | 61.0 | 64.1 | |||||
Gross margin | 39.0 | 35.9 | |||||
Selling and administrative expense | 26.3 | 20.7 | |||||
Interest expense | 2.4 | 2.1 | |||||
Total expenses | 28.7 | 22.8 | |||||
Income before taxes | 10.3 | 13.1 | |||||
Income tax expense | 5.7 | 7.2 | |||||
Net income | 4.6 | % | 5.9 | % | |||
Required Assuming that sales were $515,000 in Year 3 and $585,000 in Year 4, prepare income statements for the two years.
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