For 20Y3, Greyhound Technology Company reported its most significant decline in net income in years. At the end of the year, Duane Vogel, the president, is presented with the following condensed comparative income statement:

GREYHOUND TECHNOLOGY COMPANY Comparative Income Statement For the Years Ended December 31, 20Y3 and 20Y2
	20Y3		20Y2
Sales	$ 424,099		$ 361,000
Cost of goods sold	(312,800)		(230,000)
Gross profit	$ 111,299		$ 131,000
Selling expenses	$ (43,500)		$ (30,000)
Administrative expenses	(25,160)		(19,000)
Total operating expenses	$ (68,660)		$ (49,000)
Income from operations	$ 42,639		$ 82,000
Other revenue	1,918		1,500
Income before income tax	$ 44,557		$ 83,500
Income tax expense	(12,500)		(25,100)
Net income	$ 32,057		$ 58,400

Instructions:

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1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y2 as the base year. Enter decreases as negative amounts and negative percentages. Round percentage changes to one decimal place.

	20Y3	20Y2	Increase (Decrease) Amount	Increase (Decrease) Percent
Sales	$424,099	$361,000	$ fill in the blank	fill in the blank %
Cost of goods sold	(312,800)	(230,000)	$ fill in the blank	fill in the blank %
Gross profit	$111,299	$131,000	$ fill in the blank	fill in the blank %
Selling expenses	$(43,500)	$(30,000)	$ fill in the blank	fill in the blank %
Administrative expenses	(25,160)	(19,000)	$ fill in the blank	fill in the blank %
Total operating expenses	$(68,660)	$(49,000)	$ fill in the blank	fill in the blank %
Income from operations	$42,639	$82,000	$ fill in the blank	fill in the blank %
Other revenue	1,918	1,500	$ fill in the blank	fill in the blank %
Income before income tax	$44,557	$83,500	$ fill in the blank	fill in the blank %
Income tax expense	(12,500)	(25,100)	$ fill in the blank	fill in the blank %
Net income	$32,057	$58,400	$ fill in the blank	fill in the blank %

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2. Based on the horizontal analysis prepared in 1 which of the following statements is correct? a. Net income declined from 20Y2 to 20Y3. b. Sales increased, but the cost of goods also increased causing gross profit to decline. c. Other revenues decreased slightly and income tax expense increased. d. Over all there is decline in net income.

a and ba and cc and dAll of the above