Question 2 For 20x6, Fannie Trading Pte Ltd initiated a sales promotion campaign that included the expenditure of an additional $40,000 on advertising. At the end of the year, Richard Tan, the president is presented with the following condensed comparative statement of comprehensive income: Fannie Trading Pte Ltd Comparative Statement of Comprehensive Income For the Years Ended December 31, 20x6 and 20x5 20x6 20x5 Sales $1,325,000 $1,200,000 Sales returns and allowances 25.000 20.000 Net sales $1.300.000 $1.180.000 Cost of goods sold 682.500 613.600 Gross profit $ 617 500 $ 566.400 Selling expenses 260.000 188,800 Administrative expenses 169,000 177,000 Total operating expenses $ 429.000 $ 365 800 Income from operations $ 188.500 $ 200.600 Other income 78.000 70.800 Income before income tax $ 266,500 $ 271.400 Income tax expense 117.000 106.200 Net income $ 149.500 $ 165.200 Required a) Prepare a comparative statement of comprehensive income for the years, presenting an analysis of each item in relationship to net sales for each of the years. Round the figure to one decimal place. b) To the extent of the data permit, comment on the significant relationships revealed by the vertical analysis prepared in (a). Fannie Trading Pte Ltd Statement of Comprehensive Income For the Years Ended December 31, 20x6 and 20x5 20x6 20x5 Amount Percent Amount Percent Sales Sales returns and allowances Net sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Income from operations Other income Income before income tax Income tax expense Net income $1,325,000 25,000 $1,300,000 682,500 $ 617,500 260,000 169,000 $ 429.000 $ 188,500 78,000 $ 266,500 117,000 S 149,500 $1,200,000 20,000 $1,180,000 613,600 $ 566,400 188,800 177,000 $365,800 $ 200,600 70,800 $_271.400 106,200 S 165,200 T b