The income statements of Lameque Corp. (Lameque) for the years ended March 31, 2013 through 2015, are shown below:

Required:

a. Prepare common size and trend financial statements for Lameque. (For the trend statements, use 2013 as the base year.)

b Use the information from

(a) to evaluate the performance of Lameque. Explain fully. Your evaluation should include a comparison of Lameque’s performance from year to year.

c. How does the unusual income affect your ability to evaluate Lameque’s performance and to interpret your common size and trend financial statements?

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Lameque Corp. Income Statements For the Years Ended March 31 2015 Sales Cost of sales $5,750,000 2014 $5,225,000 2013 $4,850,000 3,150,000 2,750,000 2,561,000 Gross margin 2,600,000 2,475,000 2,289,000 Expenses: Selling and marketing 405,000 333,500 344,410 Advertising and promotion 607,500 494,500 477,730 General and administrative 258,000 210,000 190,000 Depreciation 300,000 275,000 260,000 Interest 405,000 333,500 344,410 Unusual income (gain) (500,000) Income before income taxes 1,124,500 828,500 672,450 Income tax expense Net income 200,000 160,000 150,000 $ 924,500 $ 668,500 $ 522,450