Horizontal Analysis of Income Statement For 2012, Macklin Inc. reported a significant decrease in net income. At the end of the year, John Mayer, the president, is presented with the following condensed comparative income statement: Sales Cost of goods sold Macklin Inc. Comparative Income Statement For the Years Ended December 31, 2012 and 20Y1 Gross profit Selling expenses Administrative expenses Total operating expenses Operating income Other revenue 2012 20Y1 $660,359 $551,000 (490,000) (350,000) $170,359 $201,000 $(69,000) $(46,000) (39,440) (29,000) $(106,440) $(75,000) $61,919 2,827 $126,000 2,300 $64,746 $128,300 (18,100) $46,646 (38,500) $89,800 Income before income tax expense Income tax expense Net Income Required: 1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 2011 as the base year. Use the minus sign to indicate a decrease in the "Increase/(Decrease)" columns. If required, round percentages to one decimal place. Macklin Inc. Comparative Income Statement For the Years Ended December 31, 2012 and 20Y1 Sales Cost of goods sold 2012 20Y1 $660,359 $551,000 (490,000) (350,000) Increase/ Increase/ (Decrease) (Decrease) Amount Percent % % Gross profit $170,359 $201,000 % Selling expenses $(69,000) $(46,000) % Administrative expenses (39,440) (29,000) % Total operating expenses $(108,440) $(75,000) % Operating income $61,019 $120,000 $ % Other revenue 2,827 2,300 % Income before income tax expense $64,746 $128,300 % Income tax expense (18,100) (38,500) % Net income $46,646 $89,800 % 2. Net income has from 2011 to 2012. Sales have however, the cost of goods sold has, at a faster rate than sales, causing the gross profit to