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	$480,538		$408,000
Cost of merchandise sold	353,600		260,000
Gross profit	$126,938		$148,000
Selling expenses	$49,300		$34,000
Administrative expenses	29,130		22,000
Total operating expenses	$78,430		$56,000
Income from operations	$48,508		$92,000
Other revenue	2,076		1,700
Income before income tax expense	$50,584		$93,700
Income tax expense	14,200		28,100
Net income	$36,384		$65,600

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	$480,538	$408,000	$fill in the blank e6a9f201e01df9b_1	fill in the blank e6a9f201e01df9b_2%
Cost of merchandise sold	353,600	260,000	fill in the blank e6a9f201e01df9b_3	fill in the blank e6a9f201e01df9b_4%
Gross profit	$126,938	$148,000	$fill in the blank e6a9f201e01df9b_5	fill in the blank e6a9f201e01df9b_6%
Selling expenses	$49,300	$34,000	$fill in the blank e6a9f201e01df9b_7	fill in the blank e6a9f201e01df9b_8%
Administrative expenses	29,130	22,000	fill in the blank e6a9f201e01df9b_9	fill in the blank e6a9f201e01df9b_10%
Total operating expenses	$78,430	$56,000	$fill in the blank e6a9f201e01df9b_11	fill in the blank e6a9f201e01df9b_12%
Income from operations	$48,508	$92,000	$fill in the blank e6a9f201e01df9b_13	fill in the blank e6a9f201e01df9b_14%
Other revenue	2,076	1,700	fill in the blank e6a9f201e01df9b_15	fill in the blank e6a9f201e01df9b_16%
Income before income tax expense	$50,584	$93,700	$fill in the blank e6a9f201e01df9b_17	fill in the blank e6a9f201e01df9b_18%
Income tax expense	14,200	28,100	fill in the blank e6a9f201e01df9b_19	fill in the blank e6a9f201e01df9b_20%
Net income	$36,384	$65,600	$fill in the blank e6a9f201e01df9b_21	fill in the blank e6a9f201e01df9b_22%

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