Horizontal analysis of income statement

For 20Y2, 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, 20Y2 and 20Y1

Line Item Description	20Y2	20Y1
Sales	$320,616	$294,000
Cost of goods sold	(228,000)	(190,000)
Gross profit	$92,616	$104,000
Selling expenses	$(31,250)	$(25,000)
Administrative expenses	(18,880)	(16,000)
Total operating expenses	$(50,130)	$(41,000)
Operating income	$42,486	$63,000
Other revenue	1,529	1,200
Income before income tax expense	$44,015	$64,200
Income tax expense	(12,300)	(19,300)
Net income	$31,715	$44,900

Required:

Question Content Area

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, 20Y2 and 20Y1

Line Item Description	20Y2	20Y1	Increase/ (Decrease) Amount	Increase/ (Decrease) Percent
Sales	$320,616	$294,000	$Sales	Sales%
Cost of goods sold	(228,000)	(190,000)	Cost of goods sold	Cost of goods sold%
Gross profit	$92,616	$104,000	$Gross profit	Gross profit%
Selling expenses	$(31,250)	$(25,000)	$Selling expenses	Selling expenses%
Administrative expenses	(18,880)	(16,000)	Administrative expenses	Administrative expenses%
Total operating expenses	$(50,130)	$(41,000)	$Total operating expenses	Total operating expenses%
Operating income	$42,486	$63,000	$Operating income	Operating income%
Other revenue	1,529	1,200	Other revenue	Other revenue%
Income before income tax expense	$44,015	$64,200	$Income before income tax expense	Income before income tax expense%
Income tax expense	(12,300)	(19,300)	Income tax expense	Income tax expense%
Net income	$31,715	$44,900	$Net income	Net income%