Camellia Company€™s income statements for the last three years are as follows:

Required:
1. Prepare a common-size income statement for year 2 by expressing each line item for year 2 as a percentage of that same line item from year 1.
2. Prepare a common-size income statement for year 3 by expressing each line item for year 3 as a percentage of that same line item from year 1.

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Camellia Company Income Statements For the Years 1, 2, and 3 Year 3 $ 1,700,000 (1,000,000 700,000 YearT Year 2 Sales Less: Cost of goods sold $1,000,000 700,000) 300,000 $1,200,000 (700,000) S 500,000 Gross margin Less operating expenses Selling expenses (150,000) S 100,000 $ 75,000 (220,000) (250,000) (60,000 $ 220,000 Administrative expenses (50,000) (120,000 S 330,000 Net operating income Less: Interest expense 25,000 (25,000) (25,000 S 305,000 Income before taxes $ 195,000