Me OBJ. 2 PR 17-1A Horizontal analysis of income statement 1. Sales, 12.0% increase For 2082, 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: Excel McDade Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 2041 General 2012 2011 Ledger Sales $16,800,000 $15,000,000 Show Cost of goods sold. 11,500,000 10,000,000 How Gross profit... $ 5,300,000 $ 5,000,000 Selling expenses. $ 1.770,000 $ 1,500,000 Administrative expenses. 1,220,000 1,000,000 Total operating expenses $ 2,990,000 $ 2.500.000 Income from operations... $ 2,310,000 $ 2,500,000 Other revenue 256,950 225,000 Income before income tax $ 2,566,950 $ 2,725,000 Income tax expense... 1,413,000 1,500,000 Net income.. $ 1,153,950 $ 1,225,000 Instructions 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. 2. To the extent the data permit, comment on the significant relationships revealed by the horizontal analysis prepared in (1). ***