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.

STUART COMPANY
Income Statements
	Year 4	Year 3
Sales
Cost of goods sold
Gross margin	0	0
Selling and administrative expenses
Interest expense
Total expenses	0	0
Income before taxes
Income tax expense
Net income	$0	$0