For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $13,000 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	$454,000		$390,000
Cost of goods sold	208,840		202,800
Gross profit	$245,160		$187,200
Selling expenses	$95,340		$78,000
Administrative expenses	49,940		50,700
Total operating expenses	$145,280		$128,700
Income from operations	$99,880		$58,500
Other revenue	22,700		15,600
Income before income tax	$122,580		$74,100
Income tax expense	49,940		31,200
Net income	$72,640		$42,900

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 2041 20Y2 Amount 20Y2 Percent 20Y1 Amount 20Y1 Percent $454,000 % $390,000 % Sales 208,840 % 202,800 % $245,160 % $187,200 % Cost of goods sold Gross profit Selling expenses Administrative expenses $95,340 % $78,000 % 49,940 % 50,700 $145,280 % $128,700 % $99,880 % $58,500 % Total operating expenses Income from operations Other revenue Income before income tax 22,700 % 15,600 % % $74,100 % $122,580 49,940 Income tax expense % 31,200 % Net income $72,640 % $42,900 % as a 2. The vertical analysis indicates that the costs other than selling expenses (cost of goods sold and administrative expenses) percentage of sales. As a result, net income as a percentage of sales . The sales promotion campaign appears to have been . While selling expenses as a percent of sales slightly, the cost was more than made up for by sales