Income statement data for Montana Images Company for the years ended December 31, 2012 and 2011, are as follows:

a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for 2012 when compared with 2011. Round to one decimal place.
b. What conclusions can be drawn from the horizontalanalysis?

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Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Income before income tax Income tax expense Net income 2012 $579,000 343,500 $235,500 46,000 2011 $500,000 300,000 $200,000 40,000 10,000 50,000 $150,000 37,500 $1 12,500 57,000 $178,500 45,000 133500