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: Macklin Inc. Comparative Income Statement For the Years Ended December 31, 2012 and 20Y1 Sales Cost of goods sold Gross profit Selling expenses Administrative expenses 2012 20Y1 $627,570 $570,000 (439,200) (360,000) $188,370 $210,000 $(61,200) $(48,000) (35,940) (30,000) $(97,140) $(78,000) Total operating expenses Operating income $91,230 $132,000 Other revenue 3,074 2,400 Income before income tax expense $94,304 $134,400 Income tax expense (26,400) (40,300) Net income $67,904 $94,100 Required: 1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y1 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 Increase/ (Decrease) Amount Increase/ (Decrease) Percent Line Item Description 20Y2 Sales Cost of goods sold 20Y1 $627,570 $570,000 (439,200) (360,000). 57.570 10.1 % 79.200 22 % Gross profit $188,370 $210,000 -21.630 -10.3 % Selling expenses $(61,200) $(48,000) 13.200 V 27.5 % Administrative expenses (35,940) (30,000) 5,940 19.8 % Total operating expenses $(97,140) $(78,000) 19.140 V 24.5 % Operating income Other revenue $91,230 $132,000 3,074 2,400 -40.770 674 30.8 X % 28 X % Income before income tax expense Income tax expense $94,304 $134,400 (26,400) (40,300) -40,096 -29.8 % -13,900 V 34.4 X % Net income $67,904 $94,100 -26.196 -27.8 %