The following percentages apply to Walden Company for 2005 and 2006.

Required:
Assuming that sales were \($600,000\) in 2005 and \($800,000\) in 2006, prepare income statements for the two years.

Transcribed Image Text:

2006 2005 Sales 100.0% 100.0% Cost of Goods Sold 61.0 64.0 Gross Margin 39.0 36.0 Selling and Administrative Expenses 26.5 20.5 Interest Expense 2.5 2.0 Total Expenses 29.0 22.5 Income before Taxes 10.0 13.5 Income Tax Expense 5.5 7.0 Net Income 4.5% 6.5%