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	$432,280		$370,000
Cost of merchandise sold	308,200		230,000
Gross profit	$124,080		$140,000
Selling expenses	$44,180		$31,000
Administrative expenses	26,120		20,000
Total operating expenses	$70,300		$51,000
Income from operations	$53,780		$89,000
Other revenue	1,922		1,600
Income before income tax expense	$55,702		$90,600
Income tax expense	15,600		27,200
Net income	$40,102		$63,400

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	$432,280	$370,000	$fill in the blank cbc8dafcb02df95_1	fill in the blank cbc8dafcb02df95_2%
Cost of merchandise sold	308,200	230,000	fill in the blank cbc8dafcb02df95_3	fill in the blank cbc8dafcb02df95_4%
Gross profit	$124,080	$140,000	$fill in the blank cbc8dafcb02df95_5	fill in the blank cbc8dafcb02df95_6%
Selling expenses	$44,180	$31,000	$fill in the blank cbc8dafcb02df95_7	fill in the blank cbc8dafcb02df95_8%
Administrative expenses	26,120	20,000	fill in the blank cbc8dafcb02df95_9	fill in the blank cbc8dafcb02df95_10%
Total operating expenses	$70,300	$51,000	$fill in the blank cbc8dafcb02df95_11	fill in the blank cbc8dafcb02df95_12%
Income from operations	$53,780	$89,000	$fill in the blank cbc8dafcb02df95_13	fill in the blank cbc8dafcb02df95_14%
Other revenue	1,922	1,600	fill in the blank cbc8dafcb02df95_15	fill in the blank cbc8dafcb02df95_16%
Income before income tax expense	$55,702	$90,600	$fill in the blank cbc8dafcb02df95_17	fill in the blank cbc8dafcb02df95_18%
Income tax expense	15,600	27,200	fill in the blank cbc8dafcb02df95_19	fill in the blank cbc8dafcb02df95_20%
Net income	$40,102	$63,400	$fill in the blank cbc8dafcb02df95_21	fill in the blank cbc8dafcb02df95_22%

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