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Scherer Company provided the following income statements for its first 3 years of operation:
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| Scherer Company |
| Income Statements |
| Years of Operation |
| 1 | Year 1 | Year 2 | Year 3 | |
| 2 | Net sales | $1,100,000.00 | $1,210,000.00 | $1,430,000.00 |
| 3 | Less: Cost of goods sold | 291,000.00 | 323,000.00 | 354,000.00 |
| 4 | Gross margin | $809,000.00 | $887,000.00 | $1,076,000.00 |
| 5 | Less: | |||
| 6 | Operating expenses | 412,000.00 | 493,000.00 | 585,500.00 |
| 7 | Income taxes | 109,400.00 | 121,400.00 | 140,600.00 |
| 8 | Net income | $287,600.00 | $272,600.00 | $349,900.00 |
| Required: | |
| Prepare common-size income statements by using net sales as the base. |
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