14-1 2.

A comparative Income statement is given below for McKenzie Sales, Ltd., of Toronto: McKenzie Sales, Ltd. Comparative Income Statement This Year Sales $7,340,000 Cost of goods sold 4,700,000 Gross margin 2.640,000 Selling and administrative expenses: Selling expenses 1,385,000 Administrative expenses 711,500 Total expenses 2.096,500 Net operating income 543,500 Interest expense 102,000 Net income before taxes $441,500 Last Year $5,578,400 3,510.500 2,067,900 1,079,000 617,500 1,696,500 371,400 90,000 $ 281,400 Members of the company's board of directors are surprised to see that net income increased by only $160,100 when sales increased by $1,761,600 Required: 1. Express each year's income statement in common-size percentages. (Round your percentage answers to 1 decimal place (le, 0.1234 should be entered as 12.3).) This Year Last Year % % Sales Cost of goods sold Gross margin Selling and administrative expenses Selling expenses Administrative expenses Total selling and administrative expenses Not operating income Interest expense RRRRR ***