Exercise 14-1 Common-Size Income Statement (LO14-1) A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: Last Year $5,601,200 3,508,000 2,093, 200 McKenzie Sales, Ltd. Comparative Income Statement This Year Sales $7,370,000 Cost of goods sold 4,680,000 Gross margin 2,690,000 Selling and administrative expenses: Selling expenses 1,393, 000 Administrative expenses 708,000 Total expenses 2,101, 000 Net operating income 589,000 Interest expense 102,000 Net income before taxes $ 487,000 1,072,500 615,000 1,687,500 405, 700 88,000 317,700 $ Members of the company's board of directors are surprised to see that net income increased by only $169,300 when sales increased by $1,768,800. Required: 1. Express each year's income statement in common-size percentages. (Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) Members of the company's board of directors are surprised to see that net income increased by only $169,300 when sales increased by $1,768,800. Required: 1. Express each year's income statement in common-size percentages. (Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) This Year Last Year % % 1% % 0.0 % 0.0 % % Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total selling and administrative expenses Net operating income Interest expense Net income before taxes 1% % % 0.0 % 0.0 % % 0.0 % 0.0 % % 0.0 % 0.0 %