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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,

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 $768,635 $665,000
Cost of goods sold 554,400 420,000
Gross profit $214,235 $245,000
Selling expenses $78,400 $56,000
Administrative expenses 45,080 35,000
Total operating expenses $123,480 $91,000
Income from operations $90,755 $154,000
Other income 3,469 2,800
Income before income tax $94,224 $156,800
Income tax expense 26,400 47,000
Net income $67,824 $109,800

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 $768,635 $665,000 $ %
Cost of goods sold 554,400 420,000 %
Gross profit $214,235 $245,000 $ %
Selling expenses $78,400 $56,000 $ %
Administrative expenses 45,080 35,000 %
Total operating expenses $123,480 $91,000 $ %
Income from operations $90,755 $154,000 $ %
Other income 3,469 2,800 %
Income before income tax $94,224 $156,800 $ %
Income tax expense 26,400 47,000 %
Net income $67,824 $109,800 $ %

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

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