For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $21,000 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	$761,000		$654,000
Cost of goods sold	388,110		359,700
Gross profit	$372,890		$294,300
Selling expenses	$152,200		$124,260
Administrative expenses	76,100		78,480
Total operating expenses	$228,300		$202,740
Income from operations	$144,590		$91,560
Other revenue	45,660		26,160
Income before income tax	$190,250		$117,720
Income tax expense	76,100		45,780
Net income	$114,150		$71,940

Required:

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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 Amount	20Y2 Percent	20Y1 Amount	20Y1 Percent
Sales	$761,000	fill in the blank 0dc5edf9efce041_1%	$654,000	fill in the blank 0dc5edf9efce041_2%
Cost of goods sold	388,110	fill in the blank 0dc5edf9efce041_3%	359,700	fill in the blank 0dc5edf9efce041_4%
Gross profit	$372,890	fill in the blank 0dc5edf9efce041_5%	$294,300	fill in the blank 0dc5edf9efce041_6%
Selling expenses	$152,200	fill in the blank 0dc5edf9efce041_7%	$124,260	fill in the blank 0dc5edf9efce041_8%
Administrative expenses	76,100	fill in the blank 0dc5edf9efce041_9%	78,480	fill in the blank 0dc5edf9efce041_10%
Total operating expenses	$228,300	fill in the blank 0dc5edf9efce041_11%	$202,740	fill in the blank 0dc5edf9efce041_12%
Income from operations	$144,590	fill in the blank 0dc5edf9efce041_13%	$91,560	fill in the blank 0dc5edf9efce041_14%
Other revenue	45,660	fill in the blank 0dc5edf9efce041_15%	26,160	fill in the blank 0dc5edf9efce041_16%
Income before income tax	$190,250	fill in the blank 0dc5edf9efce041_17%	$117,720	fill in the blank 0dc5edf9efce041_18%
Income tax expense	76,100	fill in the blank 0dc5edf9efce041_19%	45,780	fill in the blank 0dc5edf9efce041_20%
Net income	$114,150	fill in the blank 0dc5edf9efce041_21%	$71,940	fill in the blank 0dc5edf9efce041_22%

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2. The vertical analysis indicates that the costs other than selling expenses (cost of goods sold and administrative expenses)

improved deteriorated as a percentage of sales. As a result, net income as a percentage of sales increased decreased. The sales promotion campaign appears to have been

successful unsuccessful. While selling expenses as a percent of sales increased decreased slightly, the increased decreased cost was more than made up for by

increased decreased sales.