Three years ago, Dana Mann and her brother-in-law Eric Boldt opened Cheyenne Corporation. For the first two years, business was good, but the following condensed income results for 2018 were disappointing Cheyenne Corporation Income Statement For the Year Ended December 31, 2018 Net sales Cost of goods sold Gross profit Operating expenses $800,000 632,000 168,000 Selling expenses Administrative expenses $116,000 23,200 139,200 Net income $28,800 Dana believes the problem lies in the relatively low gross profit rate (gross profit divided by net sales) of 21%. Eric believes the problem is that operating expenses are too high Dana thinks the gross profit rate can be improved by making both of the following changes. She does not anticipate that these changes will have any effect on operating expenses 1. Increase average selling prices by 17%. This increase is expected to lower sales volume so 2. Buy merchandise in larger quantities and take all purchase discounts. These changes to that total sales will increase only 6% selling prices and purchasing practices are expected to increase the gross profi t rate from 21% to 24% Eric thinks expenses can be cut by making both of the following changes. He feels that these changes will not have any effect on net sales 1. Cut sales salaries (selling expense) of $60,000 in half and give sales personnel a commission 2. Reduce store deliveries to one day per week rather than twice a week. This change will reduce of 2% of net sales delivery expenses (selling expense) of $30,000 by 4090 Dana and Eric come to you for help in deciding the best way to improve net income Answer the following Prepare a condensed income statement for 2019, assuming Dana's changes are implemented. (If there is a net loss then enter the amount using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Cheyenne Corporation Income Statement