Refer to the information for Cuneo Company below.
Cuneo Company's income statements for the last 3 years are as follows:

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

Transcribed Image Text:

Cuneo Company Income Statements For the Years 1, 2, and 3 Year 1 $1,000,000 S 300,000 Year 2 S1,200,000 S 500,000 Year 3 S 1,700,000 (1,000,000) S 700,000 Sales Less: Cost of goods sold (700,000) 700,000) Gross margin Less operating expenses: Selling expenses Administrative expenses (150,000) (50,000) (220,000) (60,000) S 220,000 (250,000) (120,000) S 330,000 Operating income Less: Interest expense 100,000 Income before taxes 75,000 S 195.000 305.000