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Three years ago, Jennifer Davis and her brother$-$in$-$law David Miller opened Shamrock Department Store. For the first $2$ years, business was good, but the following condensed income statement results for $2027$ were disappointing.SHAMROCK DEPARTMENT STOREIncome StatementFor the Year Ended December $31,2027$Net sales $760,000$Cost of goods sold $608,000$Gross profit $152,000$Operating expensesSelling expenses $107,500$Administrative expenses $21,500129,000$Net income $$23,000$Jennifer believes the problem lies in the relatively low gross profit rate of $20\%.$ David believes the problem is that operating expenses are too high.Jennifer thinks the gross profit rate can be improved by making two changes. $(1)$ Increase average selling prices by $15\%$; this increase is expected to lower sales volume so that total sales dollars will increase only $4\%.(2)$ Buy merchandise in larger quantities and take all purchase discounts. These changes to purchasing practices are expected to increase the gross profit rate from its current rate of $20\%$ to a new rate of $25\%.$ Jennifer does not anticipate that these changes will have any effect on operating expenses.David thinks expenses can be cut by making these two changes. $(1)$ Cut $2028$ sales salaries of $$64,500$in half and give sales personnel a commission of $2\%$ of net sales. $(2)$ Reduce store deliveries to one day per week rather than twice a week; this change will reduce $2028$ delivery expenses of $$43,000$ by $40\%.$David feels that these changes will not have any effect on net sales.Jennifer and David come to you for help in deciding the best way to improve net income.Prepare a condensed income statement for $2028$ assuming Jennifer's changes are implemented.

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