Horizontal Analysis of Income Statement

For 20Y2, McDade Company reported a decline in net income. At the end 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, 20Y2 and 20Y1
	20Y2		20Y1
Sales	$636,272		$532,000
Cost of merchandise sold	476,000		340,000
Gross profit	$160,272		$192,000
Selling expenses	$67,500		$45,000
Administrative expenses	38,080		28,000
Total operating expenses	$105,580		$73,000
Income from operations	$54,692		$119,000
Other revenue	2,807		2,200
Income before income tax expense	$57,499		$121,200
Income tax expense	16,100		36,400
Net income	$41,399		$84,800

Required:

1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y1 as the base year. Round percentages to one decimal place. Use the minus sign to indicate a decrease in the "Difference" columns.

McDade Company
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
	20Y2	20Y1	Difference - Amount	Difference - Percent
Sales	$636,272	$532,000	$fill in the blank d5b27df83058064_1	fill in the blank d5b27df83058064_2%
Cost of merchandise sold	476,000	340,000	fill in the blank d5b27df83058064_3	fill in the blank d5b27df83058064_4%
Gross profit	$160,272	$192,000	$fill in the blank d5b27df83058064_5	fill in the blank d5b27df83058064_6%
Selling expenses	$67,500	$45,000	$fill in the blank d5b27df83058064_7	fill in the blank d5b27df83058064_8%
Administrative expenses	38,080	28,000	fill in the blank d5b27df83058064_9	fill in the blank d5b27df83058064_10%
Total operating expenses	$105,580	$73,000	$fill in the blank d5b27df83058064_11	fill in the blank d5b27df83058064_12%
Income from operations	$54,692	$119,000	$fill in the blank d5b27df83058064_13	fill in the blank d5b27df83058064_14%
Other revenue	2,807	2,200	fill in the blank d5b27df83058064_15	fill in the blank d5b27df83058064_16%
Income before income tax expense	$57,499	$121,200	$fill in the blank d5b27df83058064_17	fill in the blank d5b27df83058064_18%
Income tax expense	16,100	36,400	fill in the blank d5b27df83058064_19	fill in the blank d5b27df83058064_20%
Net income	$41,399	$84,800	$fill in the blank d5b27df83058064_21	fill in the blank d5b27df83058064_22%

2. Net income has from 20Y1 to 20Y2. Sales have ; however, the cost of merchandise sold has , causing the gross profit to .