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	$908,240	$760,000
Cost of goods sold	(672,000)	(480,000)
Gross profit	$236,240	$280,000
Selling expenses	$(96,000)	$(64,000)
Administrative expenses	(54,400)	(40,000)
Total operating expenses	$(150,400)	$(104,000)
Operating income	$85,840	$176,000
Other revenue	4,141	3,200
Income before income tax expense	$89,981	$179,200
Income tax expense	(25,200)	(53,800)
Net income	$64,781	$125,400

Required:

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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	$908,240	$760,000	$Sales	Sales%
Cost of goods sold	(672,000)	(480,000)	Cost of goods sold	Cost of goods sold%
Gross profit	$236,240	$280,000	$Gross profit	Gross profit%
Selling expenses	$(96,000)	$(64,000)	$Selling expenses	Selling expenses%
Administrative expenses	(54,400)	(40,000)	Administrative expenses	Administrative expenses%
Total operating expenses	$(150,400)	$(104,000)	$Total operating expenses	Total operating expenses%
Operating income	$85,840	$176,000	$Operating income	Operating income%
Other revenue	4,141	3,200	Other revenue	Other revenue%
Income before income tax expense	$89,981	$179,200	$Income before income tax expense	Income before income tax expense%
Income tax expense	(25,200)	(53,800)	Income tax expense	Income tax expense%
Net income	$64,781	$125,400	$Net income	Net income%

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2. Net income has fill in the blank 1 of 4

increaseddecreased

from 20Y1 to 20Y2. Sales have fill in the blank 2 of 4

increaseddecreased

; however, the cost of goods sold has fill in the blank 3 of 4

increaseddecreased

at a faster rate than sales, causing the gross profit to fill in the blank 4 of 4

increasedecrease

Horizpntal analysis of income statement For 2022, 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: 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 "Increasa/(Decrease)" columns. If required, round percentages to one decimal place. 2. Net income has Irom 20r1 to 20r2. Sales have ; however, the cost of goods sold has at a faster rate than sales, causing the gross prolit to