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The following percentages apply to Franklin Company for Year 3 and Year 4:

	Year 4				Year 3
Sales		100.0	%			100.0	%
Cost of goods sold		61.1				64.1
Gross margin		38.9				35.9
Selling and administrative expense		26.4				20.4
Interest expense		2.6				2.1
Total expenses		29.0				22.5
Income before taxes		9.9				13.4
Income tax expense		5.5				7.1
Net income		4.4	%			6.3	%

Required Assuming that sales were $515,000 in Year 3 and $585,000 in Year 4, prepare income statements for the two years.

FRANKLIN COMPANY Income Statements Sales Cost of goods sold Gross margin Selling and administrative expenses Interest expense Total expenses Income before taxes Income tax expense Net income Year 4 $ 0 0 Year 3 0 $ 0 0 0