Operating Income

Problem 3-27 Using common size income statements to make comparisons LO 3-5 The following income statements were drawn from the annual reports of Toner Sales Company: Net sales Cost of goods sold Gross margin Less: Operating expense Selling and administrative expenses Net Income 2018 $200,eee (90,eee) 110,00 2019 $2ee, eee (80,000) 120,000 (60,eee). $50,000 (50,000) $70,000 "All dollar amounts are reported in thousands. The president's message in the company's annual report stated that the company had implemented a strategy to increase market share by spending more on advertising. The president indicated that prices held steady and sales grew as expected. Prepare common size income statements and make appropriate references to the differences between 2018 and 2019. (Round all intermediate calculations and final answers for percentage values to 1 decimal place. Enter answers in millions, not in dollar.)) 2019 TONER SALES COMPANY Income Statement For the Years Ended December 31, 2018 and 2019 2018 et sales s 200.000 100.0 $ 200.000 Cost of goods sold 00.000 50 0 .000 Gross margin 110.000 55.0 120.000 Operating expenses 60,000 300|| 50.000 Operating income Not income $ 50,000 25.0 % $ 70,000 100.0% 60.0 250 35.0%