Exercise 14-1 Common-Size Income Statement [LO14-1] A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: McKenzie Sales, Ltd. Comparative Income Statement This Year Last Year Sales $7,380,000 $5,608,800 Cost of goods sold 4,740,000 3,514,000 Gross margin 2,640,000 2,094,800 Selling and administrative expenses Selling expenses 1,383,000 1,080,000 Administrative expenses 704,000 612.500 Total expenses 2,087,000 1,692,500 Not operating income 553,000 402,300 Interest expense 97,000 90,000 Net income before taxes $ 456,000 $ 312,300 Members of the company's board of directors are surprised to see that net income increased by only $143,700 when sales increased by $1.771,200. 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 100.0% Sales Last Year 100.0% Members of the company's board of directors are surprised to see that net income increased by only $143,700 when sales increased by $1,771,200. Required: 1. Express each year's Income statement in common-size percentages. (Round your percentage answers to 1 decimal place (l.e., 0.1234 should be entered as 12.3).) This Year 100.0% 64.2% 35.8 % Last Year 100.0% 62.71% 37.4% % % 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 Net income before taxes 90 0.01% 35.8 % % 0.0 % 37.4% % 374% 35,8 %