For 2010, Egils Inc. reported its most significant increase in net income in years. At the end of the year, David Dickens, the president, is presented with the following condensed comparative income statement:

Instructions1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 2009 as the base year. Round to one decimal place.2. To the extent the data permit, comment on the significant relationships revealed by the horizontal analysis prepared in(1).

Egils Inc. Comparative Income Statement For the Years Ended December 31, 2010 and 2009 2010 2009 $126,200 2,426 $123,774 58,800 $ 64,974 $ 17,310 13,464 $ 30,774 $ 34,200 1,000 $ 35,200 12,000 $ 23,200 Sales $100,000 2,000 $ 98,000 50,000 $ 48,000 $ 15,000 12,000 $ 27,000 $ 21,000 1,000 $ 22,000 6,000 $ 16,000 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 Net income