For 2012, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $20,000 for advertising. At the end of the year, Lumi Neer, the president, is presented with the following condensed comparative income statement: Tri-Comic Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales Cost of merchandise sold Gross profit Selling expenses Administrative expenses Total operating expenses Income from operations Other revenue Income before income tax expense $705,000 $606,000 324,300 315,120 $380,700 $290,880 $133,950 $109,080 70,500 72,720 $204,450 $181,800 $176,250 $109,080 35,250 36,360 $211,500 $145,440 84,600 60,600 $126,900 $84,840 Income tax expense Net income Required: 1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to sales for each of the years. Enter percentages as whole numbers. Enter all amounts as positive numbers. Tri-Comic Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y2 Amount Percent 20Y1 20Y1 Amount Percent Sales $705,000 % $606,000 % Cost of merchandise sold Gross profit 324,300 % 315,120 % $380,700 % $290,880 % Selling expenses $133,950 % Administrative expenses 70,500 % $109,080 72,720 % % Total operating expenses $204,450 % $181,800 % Income from operations Other revenue $176,250 35,250 % % $109,080 36,360 % % Income before income tax expense $211,500 Income tax expense % Net income 84,600 $126,900 % $145,440 60,600 % % % $84,840 % 2. The vertical analysis indicates that the costs other than selling expenses (cost of merchandise sold and administrative expenses) campaign appears to have been . While selling expenses as a percent of sales slightly, the as a percentage of sales. As a result, net income as a percentage of sales The sales promotion cost was more than made up for by sales.