Vertical Analysis of Income Statement For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $17,000 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 $521,000 $606,000 315,120 Cost of merchandise sold 291,760 Gross profit $290,880 $229,240 Selling expenses $127,260 $104,200 Administrative expenses 66,660 67,730 Total operating expenses $193,920 $171,930 Income from operations $96,960 $57,310 Other revenue 18,180 31,260 Income before income tax expense $115,140 $88,570 Income tax expense 48,480 36,470 Net income $66,660 $52,100 Required: 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. Enter percentages as whole numbers. Enter all amounts as positive numbers. Tri-Comic Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 2012 20Y1 20Y1 Amount Percent Amount Percent Sales $606,000 % $521,000 % Cost of merchandise sold 315,120 % 291,760 % Gross profit $290,880 % $229,240 % Selling expenses $127,260 % $104,200 % Administrative expenses 66,660 % 67,730 % Total operating expenses $193,920 % $171,930 % Income from operations $96,960 % $57,310 % Other revenue 18,180 % 31,260 % Income before income tax expense $115,140 % $88,570 % Income tax expense 48,480 % 36,470 % Net income $66,660 % $52,100 % 2. The vertical analysis indicates that the costs other than selling expenses (cost of merchandise sold and administrative expenses) . The sales promotion campaign appears to have been While selling expenses as a percent of sales sales. as a percentage of sales. As a result, net income as a percentage of sales slightly, the cost was more than made up for by