Three years ago, Patricia Johnson and her brother-in-law John Williams opened Larkspur Department Store. For the first 2 years. business was good, but the following condensed income statement results for 2027 were disappointing. Patricia believes the problem lies in the relatively low gross profit rate of 20%. John believes the problem is that operating expenses are too high. Patricia thinks the gross profit rate 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 profit rate from its current rate of 20% to a new rate of 25%. Patricia does not anticipate that these changes will have any effect on operating expenses. John thinks expenses can be cut by making these two changes. (1) Cut 2028 sales salaries of $61,500 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 2028 delivery expenses of $41,000 by 40%. John feels that these changes will not have any effect on net sales. Patricia and John come to you for help in deciding the best way to improve net income. With the class divided into groups, answer the following. (a1) - Your answer is partially correct. Prepare a condensed income statement for 2028 assuming Patricia's changes are implemented. LARKSPUR DEPARTMENT STORE Projected Income Statement For the Month Ended December 31, 2028 eTextbook and Media Save for Later Attempts: 1 of 3 used Submit