The following information was drawn from the records of Toner Sales Company:

Required
a. Prepare a multistep income statement for each year.
b. Prepare a common size income statement for each year.
c. At a recent meeting of the stockholders, Toner’s president stated Year 3 would be a very good year with net income rising significantly. Write a brief memo explaining whether you agree or disagree with the president. Assume that the operating trends between Year 1 and Year 2 continue through Year 3.

Transcribed Image Text:

Year 1 Year 2 Net sales Cost of goods sold Operating expenses Loss on the sale of land $200,000 $200,000 (80,000) (60,000) -0- (24,000)