1 2 Sales 3 Cost of goods sold McDade Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 2012 20Y1 $7,425,600.00 $6,720,000.00 2,688,000.00 2,240,000.00 Gross profit $4,737,600.00 $4,480,000.00 s Selling expenses $1,096,200.00 $870,000.00 Administrative expenses 636,300.00 505,000.00 7 Total operating expenses $1,732,500.00 $1,375,000.00 Income from operations $3,005,100.00 $3,105,000.00 Other income 144,300.00 130,000.00 10 Income before income tax $3,149,400.00 $3,235,000.00 11 Income tax expense 12 Net income 75,400.00 $3,074,000.00 65,000.00 $3,170,000.00 1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y1 as the base year. Use the minus sign to indicate an amount or percent decrease. If required, round percentages to one decimal place. 2. To the extent the data permit, comment on the significant relationships revealed by the horizontal analysis prepared in (1). Prepare a comparative income statement with horizontal analysis for the two-year period, using 2011 as the base year. Use the minus sign to indicate an amount or percent decrease. If required, round percentages to one decimal place. 2 Sales Cost of goods sold McDade Company Comparative Income Statement For the Years Ended December 31, 2012 and 20Y1 2012 Increase Increase (Decrease) (Decrease) 2011 Amount Percent $7,425,600.00 $6,720,000.00 2,688,000.00 2,240,000.00 Gross profit $4,737,600.00 $4,480,000.00 Selling expenses $1,096,200.00 $870,000.00 Administrative expenses 636,300.00 505,00000 Total operating expenses $1,732,500.00 $1,375,000.00 Income from operations $3,005,100.00 $3,105,000.00 Other income 144,500.00 130,00000 11 Income before income tax $5,149,400.00 $5,255,000.00 Income tax expense 75,400.00 65,000.00 13 Net income $3,074,000.00 $3,170,000.00