The following percentages apply to Walton Company for 2007 and 2008.
|
2008
|
2007
|
|
Sales
|
100.0%
|
100.0%
|
|
Cost of goods sold
|
61.0
|
64.0
|
|
Gross margin
|
39.0
|
36.0
|
|
Selling and administrative expenses
|
26.5
|
20.5
|
|
Interest expense
|
2.5
|
2.0
|
|
Total expenses
|
29.0
|
22.5
|
|
Income before taxes
|
10.0
|
13.5
|
|
Income tax expense
|
5.5
|
7.0
|
|
Net income
|
4.5%
|
6.5%
|
Required
Assuming that sales were $480,000 in 2007 and $640,000 in 2008, prepare income statements for the two years.