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Exercise 13-1 Common-Size Income Statement [LO13-1]

A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto:

McKenzie Sales, Ltd. Comparative Income Statement
	This Year			Last Year
Sales	$	7,300,000		$	5,548,000
Cost of goods sold		4,650,000			3,510,500
Gross margin		2,650,000			2,037,500
Selling and administrative expenses:
Selling expenses		1,386,000			1,074,000
Administrative expenses		705,000			608,500
Total expenses		2,091,000			1,682,500
Net operating income		559,000			355,000
Interest expense		98,000			91,000
Net income before taxes	$	461,000		$	264,000

Members of the companys board of directors are surprised to see that net income increased by only $197,000 when sales increased by $1,752,000.

Required:
1.	Express each year's income statement in common-size percentages. (Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)

	This year	Last year
Sales
Gross Margin
Selling and administrative expenses:
Selling expenses
administrative expenses
total selling and administrative expenses
net operating income
interest income
net income before taxes

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