Montana Company Reported the Following Operating Results for Year 1

Essay

Montana Company reported the following operating results for Year 1 and Year 2:
$\begin{array}{|l|c|c|}\hline \text { Year } 1 & \text { Amount } &\% \text { of Sales }\\\hline \text { Sales } & 800,000 \\\hline \text { Cost of goods sold } & 440,000 \\\hline \begin{array}{c}\text { Gross margin } \\\end{array} & 360,000 \\\hline \text { Operating expenses } & 225,000 \\\hline \text { Income before taxes } & 135,000 \\\hline \text { Income taxes } & 40,000 \\\hline \text { Net income } & 95,000 \\\hline\end{array}$


$\begin{array}{|l|c|c|}\hline \text { Year } 2 & \text { Amount } &\% \text { of Sales }\\\hline \text { Sales } & 960,000 \\\hline \text { Cost of goods sold } & 635,000 \\\hline \text { Gross margin } & 325,000 \\\hline \text { Operating expenses } & 275,000 \\\hline \text { Income before taxes } & 50,000 \\\hline \text { Income taxes } & 15,000 \\\hline \text { Net income } & 35,000 \\\hline\end{array}$ 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%).