The following percentages apply to Vernon Company for Year 3 and Year 4: Year 4 100.0% 60. 9 39.1 26. 3 Sales Cost of goods sold Gross margin Selling and administrative expense Interest expense Total expenses Income before taxes Income tax expense Net income Year 3 100.0% 64.2 35.8 20.4 2.0 22.4 13.4 7.1 6.3% 5.0% Required Assuming that sales were $500,000 in Year 3 and $580,000 in Year 4, prepare income statements for the two years. VERNON COMPANY Income Statements Year 4 Year 3 Sales Cost of goods sold Gross margin Selling and administrative expenses Interest expense Total expenses Income before taxes Income tax expense Net income