Prepare a horizontal analysis of the following comparative income statement of Zinkowski, Inc. Round percentage changes to the nearest tenth of a percent.

Requirement 1. Why did net income increase by a higher percent than total revenues increased during 2010?

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Zinkowski, Inc. Comparative Income Statement Years Ended December 31, 2010 and 2009 Revenue Expenses: Cost of Goods Sold Selling and General Expenses Interest Expense Income Tax Expense Total Expenses Net Income 2010 2009 $480,000 $411,100 $254,000 $226,000 110,000 105,500 6,500 2,000 46,600 45,000 417,100 378,500 $ 62,900 $ 32,600