1. 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	$824,070		$741,000
   Cost of merchandise sold	582,800		470,000
   Gross profit	$241,270		$271,000
   Selling expenses	$80,600		$62,000
   Administrative expenses	47,420		39,000
   Total operating expenses	$128,020		$101,000
   Income from operations	$113,250		$170,000
   Other revenue	3,937		3,100
   Income before income tax expense	$117,187		$173,100
   Income tax expense	32,800		51,900
   Net income	$84,387		$121,200

   Required:

   - 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	$824,070	$741,000	$fill in the blank fcabe1076fe8019_1	fill in the blank fcabe1076fe8019_2%
   Cost of merchandise sold	582,800	470,000	fill in the blank fcabe1076fe8019_3	fill in the blank fcabe1076fe8019_4%
   Gross profit	$241,270	$271,000	$fill in the blank fcabe1076fe8019_5	fill in the blank fcabe1076fe8019_6%
   Selling expenses	$80,600	$62,000	$fill in the blank fcabe1076fe8019_7	fill in the blank fcabe1076fe8019_8%
   Administrative expenses	47,420	39,000	fill in the blank fcabe1076fe8019_9	fill in the blank fcabe1076fe8019_10%
   Total operating expenses	$128,020	$101,000	$fill in the blank fcabe1076fe8019_11	fill in the blank fcabe1076fe8019_12%
   Income from operations	$113,250	$170,000	$fill in the blank fcabe1076fe8019_13	fill in the blank fcabe1076fe8019_14%
   Other revenue	3,937	3,100	fill in the blank fcabe1076fe8019_15	fill in the blank fcabe1076fe8019_16%
   Income before income tax expense	$117,187	$173,100	$fill in the blank fcabe1076fe8019_17	fill in the blank fcabe1076fe8019_18%
   Income tax expense	32,800	51,900	fill in the blank fcabe1076fe8019_19	fill in the blank fcabe1076fe8019_20%
   Net income	$84,387	$121,200	$fill in the blank fcabe1076fe8019_21	fill in the blank fcabe1076fe8019_22%

   - Net income has increased/decreased from 20Y1 to 20Y2. Sales have increased/decreased ; however, the cost of merchandise sold has increased/decreased, causing the gross profit to increase/decrease. .