Exercise 14-1 Common-Size Income Statement [LO14-1] A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: Last Year $5,624,000 3,508,500 2,115,500 McKenzie Sales, Ltd. Comparative Income Statement This Year Sales $ 7,400,000 Cost of goods sold 4,700,000 Gross margin 2,700,000 Selling and administrative expenses: Selling expenses 1,386,000 Administrative expenses 705,500 Total expenses 2,091,500 Net operating income 608,500 Interest expense 100,000 Net income before taxes $ 508,500 1,077,500 608,000 1,685,500 430,000 84,000 $ 346,000 Members of the company's board of directors are surprised to see that net income increased by only $162,500 when sales increased by $1,776,000. Required: 1. Express each year's income statement in common-size percentages. (Round your percentage answers to 1 decimal place (.e., 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 Net operating income Interest expense Net income before taxes 0.0 % 0.0 %