Three years ago, Laura Hall and her brother-in-law Kevin Allen opened Windsor Department Store. For the first 2 years, business was good, but the following condensed income statement results for 2022 were disappointing. WINDSOR DEPARTMENT STORE Income Statement For the Year Ended December 31, 2022 Net sales $920,000 Cost of goods sold 736,000 Gross proht 184,000 Operating expenses Selling expenses $127.500 Administrative expenses 25,500 153,000 Net income $31,000 Activate Wind Laura believes the problem lies in the relatively low gross proht rate of 20%. Kevin believes the problem is that operating expenses are too high. Laura thinks the gross profitrate can be improved by makins two changes increase average selling prices by 15 here to search SONY Laura believes the problem lies in the relatively low gross profit rate of 20%. Kevin believes the problem is that operating expenses are too high. Laura thinks the gross proftrate can be improved by making two changes. (1) Increase average selling prices by 15%; this increase is expected to lower sales volume so that total sales dollars will increase only 4%. (2) Buy merchandise in larger quantities and take all purchase discounts. These changes to purchasing practices are expected to increase the gross proftrate from its current rate of 20% to a new rate of 25%. Laura does not anticipate that these changes will have any effect on operating expenses. Kevin thinks expenses can be cut by making these two changes. (1) Cut 2023 sales salaries of $76,500 in half and give sales personnel a commission of 2% of net sales. (2) Reduce store deliveries to one day per week rather than twice a week, this change will reduce 2023 delivery expenses of $51,000 by 40%. Kevin feels that these changes will not have any effect on net sales. Laura and Kevin come to you for help in deciding the best way to improve net income. Answer the following (a1) Activate Question 7 of 9 1.137 (a2) Prepare a condensed income statement for 2023 assuming Kevin's ideas are adopted. WINDSOR DEPARTMENT STORE Projected Income Statement