For 20Y2 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:

20Y2 20Y1 Diffrence in $ Difference in %

Sales 16,800,000 15,000,000 1,800,000 12%

cost of goods sold 11,500,000 10,000,000 1,500,000 15%

gross profit 5,300,000 5,000,000 300,000 6%

selling expenses 1,770,000 1,500,000 270,000 18%

administrative expenses 1,220,000 1,000,000 220,000 22%

total operating expenses 2,990,000 2,500,000 490,000 19.6%

income from operation 2,310,000 2,500,000 -190,000 -7.6%

other income 256,950 225,000 31,950 14.2%

income before income tax 2,556,950 2,725,000 -16,050 -5.8%

income tax expense 1,413,000 1,500,000 -87,000 -5.8%

net income 1,153,950 1,225,000 -71,050 -5.8%

Prepare a comparative income statement with horizontal analysis for the two- year period, using 20Y1 as the base year.

gross profit