For 20Y2, Macklin Inc. reported a significant decrease in net income. At the end of the year, John Mayer, the president, is presented with the following condensed comparative income statement: Macklin Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Operating income Other revenue Income before income tax expense Income tax expense Net income Required: 20Y1 $709,344 $608,000 (509,200) (380,000)

$200,144 $228,000 $(72,680) $(51,000) (41,790) (32,000) $(114,470) $(83,000) $85,674 $145,000 3,206 2,600 $88,880 $147,600 (24,900) (44,300) $63,980 $103,300 20Y2 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 a decrease in the "Increase/(Decrease)" columns. If required, round percentages to one decimal place.

Macklin Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 2. Net income has from 20Y1 to 20Y2. Sales have ; however, the cost of goods sold has at a faster rate than sales, causing the gross profit to