Vertical Analysis for Income Statement For 20Y6, Fishing Experiences Inc. initiated a sales promotion campaign that included the expenditure of an additional $15,000 for advertising. At the end of the year, Colt Schultz, the president, is presented with the following condensed comparative income statement: FISHING EXPERIENCES INC. Comparative Income Statement For the Years Ended December 31, 2016 and 2015 2016 2015 Sales $449,000 $522,000 (271,440) Cost of goods sold (228,990) Gross profit $ 250,560 $ 220,010 Selling expenses (109,620) Administrative expenses (46,980) (80,820) (53,880) $(134,700) $ 85,310 Total operating expenses $ (156,600) Operating income $ 93,960 15,660 Other revenue 26,940 Income before income tax $ 109,620 $ 112,250 Income tax expense (41,760) (44,900) Net income $ 67,860 $ 67,350 Instructions: 1. Prepare a comparative income statement for the two-year period, presenting a vertical analysis of each item in relationship to sales for each of the years. Fishing Experiences Inc. Comparative Income Statement For the Years Ended December 31, 2046 and 2045 2016 Amount 20Y6 Percent 2015 Amount 2045 Percent $522,000 % $449,000 % (271,440) (228,990) Sales Cost of goods sold Gross profit $220,010 Selling expenses $250,560 $(109,620) (46,980) $(156,600) Administrative expenses $(80,820) (53,880) $(134,700) $85,310 Total operating expenses Operating income $93,960 15,660 Other revenue 26,940 Income before income tax $109,620 $112,250 Income tax expense (41,760) (44,900) Net income $67,860 $67,350 2. Based on the vertical analysis prepared in 1 which of the following statements is correct? a. Costs other than selling expenses (cost of goods sold and administrative expenses) improved as a percentage of sales. b. Net income as a percentage of sales increased. C. The sales promotion campaign appears to have been successful. d. Selling expenses as a percent of sales increased slightly