Preparing Common-Size Income Statements by Using Base Period Horizontal Analysis

Scherer Company provided the following income statements for its first 3 years of operation:

Scherer Company Income Statements Years of Operation
	Year 1	Year 2	Year 3
Net sales	$1,010,000	$1,131,200	$1,353,400
Less: Cost of goods sold	(293,000)	(314,000)	(362,000)
Gross margin	$717,000	$817,200	$991,400
Less:
Operating expenses	(424,000)	(490,000)	(595,500)
Income taxes	(110,800)	(120,200)	(135,000)
Net income	$182,200	$207,000	$260,900

repare common-size income statements by using Year 1 as the base period. (Note: Enter all amounts as positive numbers, except for a net loss. Enter net loss as a negative number, if applicable. Round answers to the nearest whole percentage.)

Scherer Company
Common-Size Income Statements
Years of Operation
	Year 1	Year 1	Year 2	Year 2	Year 3	Year 3
	Dollars	Percentage	Dollars	Percentage	Dollars	Percentage
Net sales	$1,010,000	%	1,131,200	%	$1,353,400	%
Less: Cost of goods sold	(293,000)		(314,000)		(362,000)
Gross margin	$717,000		$817,200		$991,400
Less:
Operating expenses	(424,000)		(490,000)		(595,500)
Income taxes	(110,800)		(120,200)		(135,000)
Net income	$182,200		$207,000		$260,900