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	$1,000,000.00	$1,100,000.00	$1,300,000.00
Less: Cost of goods sold	(300,000.00)	(310,000.00)	(364,000.00)
Gross margin	$700,000.00	$790,000.00	$936,000.00
Less:
Operating expenses	(421,000.00)	(484,000.00)	(591,000.00)
Income taxes	(111,600.00)	(122,400.00)	(137,800.00)
Net income	$167,400.00	$183,600.00	$206,200.00

Required:

Prepare 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.)

	Year 1	Year 1	Year 2	Year 2	Year 3	Year 3
	Dollars	Percentage	Dollars	Percentage	Dollars	Percentage
Net sales	$1,000,000	100%	1,100,000	110%	$1,300,000	130%
Less: Cost of goods sold	(300,000)	100%	(310,000)	103%	(364,000)	121%
Gross margin	$700,000	100%	$790,000	fill in the blank	$936,000	fill in the blank
Less:
Operating expenses	(421,000)	fill in the blank	(484,000)	fill in the blank	(591,000)	fill in the blank
Income taxes	(111,600)	fill in the blank	(122,400)	fill in the blank	(137,800)	fill in the blank
Net income	$167,400	fill in the blank	$183,600	fill in the blank	$206,200	fill in the blank