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
	20Y2		20Y1
Sales	$547,250		$465,000
Cost of goods sold	(394,400)		(290,000)
Gross profit	$152,850		$175,000
Selling expenses	$(56,550)		$(39,000)
Administrative expenses	(33,100)		(25,000)
Total operating expenses	$(89,650)		$(64,000)
Operating income	$63,200		$111,000
Other revenue	2,476		2,000
Income before income tax expense	$65,676		$113,000
Income tax expense	(18,400)		(33,900)
Net income	$47,276		$79,100

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, 20Y2 and 20Y1
	20Y2	20Y1	Increase/ (Decrease) Amount	Increase/ (Decrease) Percent
Sales	$547,250	$465,000	$fill in the blank 41bff6014000fd2_1	fill in the blank 41bff6014000fd2_2%
Cost of goods sold	(394,400)	(290,000)	fill in the blank 41bff6014000fd2_3	fill in the blank 41bff6014000fd2_4%
Gross profit	$152,850	$175,000	$fill in the blank 41bff6014000fd2_5	fill in the blank 41bff6014000fd2_6%
Selling expenses	$(56,550)	$(39,000)	$fill in the blank 41bff6014000fd2_7	fill in the blank 41bff6014000fd2_8%
Administrative expenses	(33,100)	(25,000)	fill in the blank 41bff6014000fd2_9	fill in the blank 41bff6014000fd2_10%
Total operating expenses	$(89,650)	$(64,000)	$fill in the blank 41bff6014000fd2_11	fill in the blank 41bff6014000fd2_12%
Operating income	$63,200	$111,000	$fill in the blank 41bff6014000fd2_13	fill in the blank 41bff6014000fd2_14%
Other revenue	2,476	2,000	fill in the blank 41bff6014000fd2_15	fill in the blank 41bff6014000fd2_16%
Income before income tax expense	$65,676	$113,000	$fill in the blank 41bff6014000fd2_17	fill in the blank 41bff6014000fd2_18%
Income tax expense	(18,400)	(33,900)	fill in the blank 41bff6014000fd2_19	fill in the blank 41bff6014000fd2_20%
Net income	$47,276	$79,100	$fill in the blank 41bff6014000fd2_21	fill in the blank 41bff6014000fd2_22%

2. Net income has from 20Y1 to 20Y2. Sales have ; however, the cost of goods sold has at a faster rate than sales, causing the gross profit to