For $20$Y$2,$ McDade Company reported a decline in net income. At the end of the year, T$.$ Burrows, the president, is presented with the following condensed comparative income statement:

McDade Company

Comparative Income Statement

For the Years Ended December $31,20$Y$2$ and $20$Y$1$

$20$Y$220$Y$1$

Sales $$652,899$ $$541,000$

Cost of merchandise sold $482,800340,000$

Gross profit $$170,099$ $$201,000$

Selling expenses $$70,150$ $$46,000$

Administrative expenses $39,96029,000$

Total operating expenses $$110,110$ $$75,000$

Income from operations $$59,989$ $$126,000$

Other revenue $2,9192,300$

Income before income tax expense $$62,908$ $$128,300$

Income tax expense $17,60038,500$

Net income $$45,308$ $$89,800$

Required:

Question Content Area

$1.$ Prepare a comparative income statement with horizontal analysis for the two$-$year period, using $20$Y$1$ as the base year. Round percentages to one decimal place. Use the minus sign to indicate a decrease in the "Difference" columns.

McDade Company

Comparative Income Statement

For the Years Ended December $31,20$Y$2$ and $20$Y$1$

$20$Y$2$

$20$Y$1$ Difference

$-$ Amount Difference

$-$ Percent

Sales $$652,899$ $$541,000$ $fill in the blank $036$f$61$f$9$f$068$fc$9\_1$

fill in the blank $036$f$61$f$9$f$068$fc$9\_2$

$\%$

Cost of merchandise sold $482,800340,000$ fill in the blank $036$f$61$f$9$f$068$fc$9\_3$

fill in the blank $036$f$61$f$9$f$068$fc$9\_4$

$\%$

Gross profit $$170,099$ $$201,000$ $fill in the blank $036$f$61$f$9$f$068$fc$9\_5$

fill in the blank $036$f$61$f$9$f$068$fc$9\_6$

$\%$

Selling expenses $$70,150$ $$46,000$ $fill in the blank $036$f$61$f$9$f$068$fc$9\_7$

fill in the blank $036$f$61$f$9$f$068$fc$9\_8$

$\%$

Administrative expenses $39,96029,000$ fill in the blank $036$f$61$f$9$f$068$fc$9\_9$

fill in the blank $036$f$61$f$9$f$068$fc$9\_10$

$\%$

Total operating expenses $$110,110$ $$75,000$ $fill in the blank $036$f$61$f$9$f$068$fc$9\_11$

fill in the blank $036$f$61$f$9$f$068$fc$9\_12$

$\%$

Income from operations $$59,989$ $$126,000$ $fill in the blank $036$f$61$f$9$f$068$fc$9\_13$

fill in the blank $036$f$61$f$9$f$068$fc$9\_14$

$\%$

Other revenue $2,9192,300$ fill in the blank $036$f$61$f$9$f$068$fc$9\_15$

fill in the blank $036$f$61$f$9$f$068$fc$9\_16$

$\%$

Income before income tax expense $$62,908$ $$128,300$ $fill in the blank $036$f$61$f$9$f$068$fc$9\_17$

fill in the blank $036$f$61$f$9$f$068$fc$9\_18$

$\%$

Income tax expense $17,60038,500$ fill in the blank $036$f$61$f$9$f$068$fc$9\_19$

fill in the blank $036$f$61$f$9$f$068$fc$9\_20$

$\%$

Net income $$45,308$ $$89,800$ $fill in the blank $036$f$61$f$9$f$068$fc$9\_21$

fill in the blank $036$f$61$f$9$f$068$fc$9\_22$

$\%$

Question Content Area

$2.$ Net income has

from $20$Y$1$ to $20$Y$2.$ Sales have

; however, the cost of merchandise sold has

$,$ causing the gross profit to

$.$