For 20Y2, Tri Comic Company initiated a sales promotion campaign that included the expenditure of an additional $18,000 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 $627,000 $539,000 Cost of goods sold 288,420 269,500 Gross profit $338,580 $269,500 Selling expenses $125,400 $102,410 Administrative expenses 68,970 70,070 Total operating expenses $194,370 $172,480 Income from operations $144,210 $97,020 Other revenue 18,810 32,340 Income before income tax $163,020 $129,360 Income tax expense 62,700 53,900 Net income $100,320 $75,460 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 Amount 20Y2 Percent 20Y1 Amount 20Y1 Percent Sales $627,000 $539,000 Cost of goods sold 288,420 269,500 Gross profit $338,580 $269,500 Selling expenses $125,400 $102,410 Administrative expenses 68,970 70,070 Total operating expenses $194,370 $172,480 Income from operations $144,210 $97,020 Other revenue 18,810 32,340 Income before income tax $163,020 $129,360 Income tax expense 62,700 53,900 Net income $100,320 $75,460 2 The vertical analysis indicates that the costs other than selling expenses (cost of goods sold and administrative expenses) improved or deteriorated as a percentage of sales As a result, net income as a percentage of sales increased or decreased The sales promotion campaign appears to have been successful or unsuccessful While selling expenses as a percent of sales increased or decreased slightly, the increased or decreased cost was more than made up for by increased or decreased sales

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For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $18,000 for advertising. At the end of the year,

For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $18,000 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	$627,000	$539,000
Cost of goods sold	288,420	269,500
Gross profit	$338,580	$269,500
Selling expenses	$125,400	$102,410
Administrative expenses	68,970	70,070
Total operating expenses	$194,370	$172,480
Income from operations	$144,210	$97,020
Other revenue	18,810	32,340
Income before income tax	$163,020	$129,360
Income tax expense	62,700	53,900
Net income	$100,320	$75,460

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 Amount	20Y2 Percent	20Y1 Amount	20Y1 Percent
Sales	$627,000	%	$539,000	%
Cost of goods sold	288,420	%	269,500	%
Gross profit	$338,580	%	$269,500	%
Selling expenses	$125,400	%	$102,410	%
Administrative expenses	68,970	%	70,070	%
Total operating expenses	$194,370	%	$172,480	%
Income from operations	$144,210	%	$97,020	%
Other revenue	18,810	%	32,340	%
Income before income tax	$163,020	%	$129,360	%
Income tax expense	62,700	%	53,900	%
Net income	$100,320	%	$75,460	%

2. The vertical analysis indicates that the costs other than selling expenses (cost of goods sold and administrative expenses) improved or deteriorated as a percentage of sales. As a result, net income as a percentage of sales increased or decreased . The sales promotion campaign appears to have been successful or unsuccessful . While selling expenses as a percent of sales increased or decreased slightly, the increased or decreased cost was more than made up for by increased or decreased sales.