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	$351,440		$304,000
Cost of merchandise sold	250,800		190,000
Gross profit	$100,640		$114,000
Selling expenses	$36,400		$26,000
Administrative expenses	20,610		16,000
Total operating expenses	$57,010		$42,000
Income from operations	$43,630		$72,000
Other revenue	1,606		1,300
Income before income tax expense	$45,236		$73,300
Income tax expense	12,700		22,000
Net income	$32,536		$51,300

Required:

Question Content Area

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	$351,440	$304,000	$fill in the blank df24a1f74fad008_1	fill in the blank df24a1f74fad008_2%
Cost of merchandise sold	250,800	190,000	fill in the blank df24a1f74fad008_3	fill in the blank df24a1f74fad008_4%
Gross profit	$100,640	$114,000	$fill in the blank df24a1f74fad008_5	fill in the blank df24a1f74fad008_6%
Selling expenses	$36,400	$26,000	$fill in the blank df24a1f74fad008_7	fill in the blank df24a1f74fad008_8%
Administrative expenses	20,610	16,000	fill in the blank df24a1f74fad008_9	fill in the blank df24a1f74fad008_10%
Total operating expenses	$57,010	$42,000	$fill in the blank df24a1f74fad008_11	fill in the blank df24a1f74fad008_12%
Income from operations	$43,630	$72,000	$fill in the blank df24a1f74fad008_13	fill in the blank df24a1f74fad008_14%
Other revenue	1,606	1,300	fill in the blank df24a1f74fad008_15	fill in the blank df24a1f74fad008_16%
Income before income tax expense	$45,236	$73,300	$fill in the blank df24a1f74fad008_17	fill in the blank df24a1f74fad008_18%
Income tax expense	12,700	22,000	fill in the blank df24a1f74fad008_19	fill in the blank df24a1f74fad008_20%
Net income	$32,536	$51,300	$fill in the blank df24a1f74fad008_21	fill in the blank df24a1f74fad008_22%