Vertical Analysis of Income Statement

For $20$Y$2,$ Tri$-$Comic Company initiated a sales promotion campaign that included the expenditure of an additional $$16,000$ for advertising. At the end of the year, Lumi Neer, the president, is presented with the following condensed comparative income statement:

Tri$-$Comic Company

Comparative Income Statement

For the Years Ended December $31,20$Y$2$ and $20$Y$1$

$20$Y$220$Y$1$

Sales $$581,000$ $$500,000$

Cost of merchandise sold $284,690275,000$

Gross profit $$296,310$ $$225,000$

Selling expenses $$122,010$ $$100,000$

Administrative expenses $63,91065,000$

Total operating expenses $$185,920$ $$165,000$

Income from operations $$110,390$ $$60,000$

Other revenue $29,05015,000$

Income before income tax expense $$139,440$ $$75,000$

Income tax expense $58,10030,000$

Net income $$81,340$ $$45,000$