Montana Company reported the following operating results for Year 1 and Year 2:Year 1Amount% of SalesSales$ 800,000?Cost of goods sold___440,000?Gross margin360,000?Operating expenses___225,000?Income before taxes135,000?Income taxes____40,000?Net income$ 95,000?Year 2Amount% of SalesSales$ 960,000?Cost of goods sold___635,000?Gross margin325,000?Operating expenses___275,000?Income before taxes50,000?Income taxes____15,000?Net income$ 35,000?Required:Express each income statement component for each year as a percentage of sales. Round your answer to one decimal place (i.e. 22.5%)
What will be an ideal response?
| Year 1 | Amount | % of Sales |
| Sales | $ 800,000 | 100.0% |
| Cost of goods sold | ___440,000 | 55.0% |
| Gross margin | 360,000 | 45.0% |
| Operating expenses | ___225,000 | 28.1% |
| Income before taxes | 135,000 | 16.9% |
| Income taxes | ____40,000 | 5.0% |
| Net income | $ 95,000 | 11.9% |
| Year 2 | Amount | % of Sales |
| Sales | $ 960,000 | 100.0% |
| Cost of goods sold | ___635,000 | 66.1% |
| Gross margin | 325,000 | 33.9% |
| Operating expenses | ___275,000 | 28.6% |
| Income before taxes | 50,000 | 5.2% |
| Income taxes | ____15,000 | 1.6% |
| Net income | $ 35,000 | 3.6% |
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