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:

Line Item Description	20Y2	20Y1
Sales	$607,712	$503,000
Cost of goods sold	(454,400)	(320,000)
Gross profit	$153,312	$183,000
Selling expenses	$(64,050)	$(42,000)
Administrative expenses	(37,210)	(27,000)
Total operating expenses	$(101,260)	$(69,000)
Operating income	$52,052	$114,000
Other revenue	2,612	2,100
Income before income tax expense	$54,664	$116,100
Income tax expense	(15,300)	(34,800)
Net income	$39,364	$81,300

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.

Line Item Description	20Y2	20Y1	Increase/ (Decrease) Amount	Increase/ (Decrease) Percent
Sales	$607,712	$503,000	$Sales	Sales%
Cost of goods sold	(454,400)	(320,000)	Cost of goods sold	Cost of goods sold%
Gross profit	$153,312	$183,000	$Gross profit	Gross profit%
Selling expenses	$(64,050)	$(42,000)	$Selling expenses	Selling expenses%
Administrative expenses	(37,210)	(27,000)	Administrative expenses	Administrative expenses%
Total operating expenses	$(101,260)	$(69,000)	$Total operating expenses	Total operating expenses%
Operating income	$52,052	$114,000	$Operating income	Operating income%
Other revenue	2,612	2,100	Other revenue	Other revenue%
Income before income tax expense	$54,664	$116,100	$Income before income tax expense	Income before income tax expense%
Income tax expense	(15,300)	(34,800)	Income tax expense	Income tax expense%
Net income	$39,364	$81,300	$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

.