Vertical analysis of income statement For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $50,000 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, 20Y2 and 20Y1 20Y2 20Y1 Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Operating income Other revenue Income before income tax expense Income tax expense Net income $1,500,000 (510,000) $990,000 $ (270,000) (180,000) $ (450,000) $540,000 60,000 $ 600,000 (450,000) $ 150,000 $1,250,000 (475,000) $775,000 $ (200,000) (156,250) $ (356,250) $418,750 50,000 $ 468,750 (375,000) $ 93,750 Chapter 14 Homework Income tax expense Net income eBook Print Item (450,000) $150,000 (375,000) $93,750 1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to sales for each of the years. Round percentages to one decimal place. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Tri-Comic Company Comparative Income Statement For the Years Ended December 31, 2012 and 20Y1 2012 2011 Amount 1,250,000 475,000 X 20Y1 Percent 100.00 % 38 X % 62.00 % 16 X % Amount Sales 1,500,000 2012 Percent 100.00 % Cost of goods sold 510,000 X 34.00 X % Gross profit 990,000 66.00 % $ 775,000 Selling expenses 270,000 X 18.0 X % $ 200,000 X Administrative expenses 180,000 X 12.0 X % 156,250 X 12.50 X % Total operating expenses 450,000 X 30.0 X % $ 356,250 X 33.5 X % Operating income 540,000 Other revenue 60,000 36.00 % $ 4.00 % 418,750 33.50 % 50,000 4.00 % Income before income tax expense 600,000 40.00 % $ 468,750 37.50 Income tax expense 450,000 X 30.0 X % $ 375,000 X 30 X % Net income 150,000 10.00 % 93,750 7.50 %