For 2008, Industrial Sanitation Systems, Inc. initiated a sales promotion campaign that included the expenditure of an additional $26,000 for advertising. At the end of the year, Alex Gonzalez, the president, is presented with the condensed comparative income statement below.

Instructions
1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to net sales for each of the years. Round to two decimal places.
2. To the extent the data permit, comment on the significant relationships revealed by the vertical analysis prepared in(1).

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Industrial Sanitation Systems, Inc. Comparative Income Statement For the Years Ended December 31, 2008 and 2007 2008 2007 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 (benefit) Net income (loss) $144,000 4,000 $140,000 80,000 60,000 56,000 14,000 70,000 $128,000 3,000 $125,000 72,000 53,000 30,000 12,000 42,000 (10,000) 11,000 1,800 S (8,000) 12,800 3,000 $9,800 2,000 (2,000) 5 (6,000)