Horizontal analysis of income statement For 2012, McDade Company reported a decline in net income nd of the year, T. Burrows, the president, is presented with the following condensed comparative income statement: McDade Company Comparative Income Statement For the Years Ended December 31, 2012 and 2041 2012 2011 Sales $ 16,800,000 $ 15,000,000 Cost of goods sold (11,500,000) (10,000,000) Gross profit $5,300,000 $5,000,000 Selling expenses $(1.770,000) $(1,500,000) Administrative expenses (1,220,000) (1,000,000) Total operating expenses $ (2,990,000) $(2,500,000) Operating Income $ 2,310,000 $2,500,000 Other revenue 256,950 225,000 Income before income tax expense $ 2,566,950 $ 2,725,000 Income tax expense (1,413,000) (1,500,000) Net income $ 1,153,950 $1,225,000 1. Prepare a comparative Income statement with horizontal analysis for the year period, using 20Y1 as the base year. Round percentages to one decimal place. For those boxes in which you must enter subtracted or negative numbers use a minus sign McDade Company Comparative Income Statement Command low Mops mylow - Home eBook Show Me How For the Years Ended December 31, 2012 and 2041 Increase/(Decrease) 2012 Amount 16,800,000 15.000.000 1.800.000 Percent 200 % Sales 5.00 1.500,000 11.500.000 X 10.000.000 X Cost of goods sold 5,300,000 6,00 % 5.000.000 300,000 Gross profit 270,000 18.00 % 1.500.000 X Selling expenses 1.770,000 X 220.000 1.720,000 X 22.00% Administrative expenses % 19.60 1.220.000 X 490.000 1,000,000 X 2.500.000 - 190.000 -7.60 % 2.310.000 > 14.20 256.950 225,000 31.950 Total operating expenses Operating inc Other revenue Income before income tax expense Income tax expense 2.725.000 2.566.950 158,050 -5.8046 -87.000 5.30 1.500,000 X % 1.500.000 X 1.225.000 -71.050 -5.80 1.153.950 Net Income Feedback Check My Work Calculate the change in the amount and divide by the base (older) year amount to determine the horizontal analysis percentages a C