Instructions For 2016, Clapton Company reported a decline in net income. At the end of the year, S. Hand, the president, is presented with the following condensed comparative income statement Clapton Company Comparative Income Statement For the Years Ended December 31, 2016 and 2015 2016 $6,750,000.00 2480,000.00 2015 1 Sales 56,000,000.00 Cost of goods sold 2.000.000.00 Gross proft 54.270,000.00 $4,000,000.00 Selling expenses 51.260.000.00 625.000.00 51.000.000.00 500.000,00 Administrative expenses Instructions Selling expenses $1,000,000.00 500.000.00 6 Administrative expenses 7 Total operating expenses * Income from operations $1.260,000.00 625.000.00 $1,885,000.00 $2,385,000.00 110,000.00 $1.500,000.00 $2,500,000.00 100,000.00 Other income 10 Income before income tax $2,600,000.00 11 Income tax expense $2.495,000.00 60.000 $2.435,000.00 50,000.00 12 Net income $2.550.000.00 Required: 1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 2015 as the base year. Use the minus sign to indicate an amount or percent decrease. It required, round percentages to one decimal place 2. To the extent the data permit comment on the significant relationships revealed by the horizontal analysis Check My Work ageNOW2 Online tesc X C eBook Show Me How Calculator Horizontal analysis of income statement Income Statement Final Question Instructions Income Statement Clapton Company Shaded cells have feedback Score: 56/77 Comparative Income Statement For the Years Ended December 31, 2016 and 2015 Increase (Decrease) Increase (Decrease) 2016 2015 Amount Percent Sales 12.5% $6.750,000.00 2.480,000.00 $750,000.00 480.000.00 Cost of goods sold 24.0% 5 Gross profit $270,000.00 6.8% $6.000.000.00 2.000.000.00 $4,000,000.00 $1.000.000.00 500.000.00 $1.500,000.00 6 Selling expenses $4.270.000.00 $1.260,000.00 625,000.00 $1.885.000.00 26.0% $260.000.00 125,000.00 1 Administrative expenses 25.0% $ Total operating expenses $385,000.00 25.75 Horizontal analysis of income statement Income Statement Final Question Instructions Income Statement Shaded cells have feed 26.0% Selling expenses Administrative expenses 25.0% 25.7% Total operating expenses 4.6% Income from operations $1.260,000.00 625.000.00 $1.885.000.00 $2,385.000.00 110,000.00 $2,495,000.00 60,000.00 $2.435.000.00 51.000.000.00 500,000.00 $1,500,000.00 $2.500.000,00 100,000.00 $2.600.000.00 50,000.00 $2.550,000.00 $260.000.00 125,000.00 $385,000.00 $115,000.00 10,000.00 $105,000.00 10.000.00 $115,000.00 10.0% 10 Other income 4.0% 11 Income before income tax 20.0% 12 Income tax expense 4.5% 15 Net income