Problem 3-27A (Algo) Using common size income statements to make comparisons LO 3-8 The following income statements were drawn from the annual reports of Toner Sales Company: Net sales Cost of goods sold Year 2 $ 426,700 (285,889) 140,811 (72,539) Year 3 $ 521,700 (297,369) 224,331 (88,689) Gross margin Less: Operating expense Selling and administrative expenses Net income "All dollar amounts are reported in thousands. $ 68,272 $ 135,642 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 Year 2 and Year 3. (Round your final answers for percentage values to 1 decimal place. Enter dollar amounts in thousands, not in whole dollars.) TONER SALES COMPANY Income Statement For the Years Ended December 31, Year 2 and Year 3 Year 2 Net sales Cost of goods sold Gross margin $ 426,700 1000% 285,889 67.0 140,811 33.0 Operating expenses 72.539 17.0 Operating income $ 68.272 16.0% Year 3