Problems: Series A PR 17-1A Horizontal analysis of income statement OBJ. 2 V 1. Sales, 12.0% increase For 20Y2, MeDade 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: SHOW ME HOW McDade Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 2041 2012 2011 Cost of merchandise sold. Gross profit. Selling expenses Administrative expenses. Total operating expenses Income from operations Other revenue Income before income tax expense. Income tax expense Net income $16.800.000 11.500.000 $ 5.300.000 $ 1.770.000 1.220.000 $ 2.990.000 $ 2.310,000 256.950 $ 2,566,950 1.413.000 $ 1,153,950 $15.000.000 10,000,000 $ 5.000.000 $ 1,500,000 1.000.000 $ 2.500.000 $ 2.500.000 225.000 $ 2.725,000 1.500.000 $ 1.225.000 Instructions 1. Prepare a comparative income statement with horizontal analysis for the two-ycar period, using 2011 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)