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	$488,456		$408,000
Cost of goods sold	364,000		260,000
Gross profit	$124,456		$148,000
Selling expenses	$51,000		$34,000
Administrative expenses	29,920		22,000
Total operating expenses	$80,920		$56,000
Income from operations	$43,536		$92,000
Other income	2,128		1,700
Income before income tax	$45,664		$93,700
Income tax expense	12,800		28,100
Net income	$32,864		$65,600

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 "Difference" columns. If required, round to one decimal place.

McDade Company
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
	20Y2	20Y1	Difference - Amount	Difference - Percent
Sales	$488,456	$408,000	$fill in the blank b3a3a3063018fd4_1	fill in the blank b3a3a3063018fd4_2%
Cost of goods sold	364,000	260,000	fill in the blank b3a3a3063018fd4_3	fill in the blank b3a3a3063018fd4_4%
Gross profit	$124,456	$148,000	$fill in the blank b3a3a3063018fd4_5	fill in the blank b3a3a3063018fd4_6%
Selling expenses	$51,000	$34,000	$fill in the blank b3a3a3063018fd4_7	fill in the blank b3a3a3063018fd4_8%
Administrative expenses	29,920	22,000	fill in the blank b3a3a3063018fd4_9	fill in the blank b3a3a3063018fd4_10%
Total operating expenses	$80,920	$56,000	$fill in the blank b3a3a3063018fd4_11	fill in the blank b3a3a3063018fd4_12%
Income from operations	$43,536	$92,000	$fill in the blank b3a3a3063018fd4_13	fill in the blank b3a3a3063018fd4_14%
Other income	2,128	1,700	fill in the blank b3a3a3063018fd4_15	fill in the blank b3a3a3063018fd4_16%
Income before income tax	$45,664	$93,700	$fill in the blank b3a3a3063018fd4_17	fill in the blank b3a3a3063018fd4_18%
Income tax expense	12,800	28,100	fill in the blank b3a3a3063018fd4_19	fill in the blank b3a3a3063018fd4_20%
Net income	$32,864	$65,600	$fill in the blank b3a3a3063018fd4_21	fill in the blank b3a3a3063018fd4_22%

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