Revenue and expense data for the current calendar year for Sorenson Electronics Company and for the electronics industry are as follows. The Sorenson Electronics Company data are expressed in dollars. The electronics industry averages are expressed in percentages.

(a) Prepare a common-sized income statement comparing the results of operations for Hrothgar Electronics Company with the industry average. Round to one decimal place(b) As far as the data permit, comment on significant relationships revealed by thecomparisons.

Sorenson Electronics Company Electronics Industry Average Sales $2,050,000 50,000 $2,000,000 1,100,000 $ 900,000 $ 560,000 220,000 $ 780,000 $ 120,000 44,000 $ 164,000 20,000 $ 144,000 60,000 $ 84,000 102.5% Sales returns and allowances 2.5 Net sales 100.0% Cost of goods sold 61.0 Gross profit Selling expenses Administrative expenses Total operating expenses 39.0% 23.0% 10.0 33.0% Operating income 6.0% Other income 2.2 8.2% Other expense 1.0 Income before income tax 7.2% Income tax 5.0 Net income 2.2%