eBook Show Me HowPrint Item Question Content Area Horizontal analysis of income statement For 20Y2, Macklin Inc. reported a significant decrease in net income. At the end of the year, John Mayer, the president, is presented with the following condensed comparative income statement: Macklin Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 Line Item Description 20Y2 20Y1 Sales $662,501 $589,000 Cost of goods sold (466,200) (370,000) Gross profit $196,301 $219,000 Selling expenses $(66,250) $(50,000) Administrative expenses (38,250) (31,000) Total operating expenses $(104,500) $(81,000) Operating income $91,801 $138,000 Other revenue 3,073 2,500 Income before income tax expense $94,874 $140,500 Income tax expense (26,600) (42,200) Net income $68,274 $98,300 Required: Question Content Area 1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y1 as the base year. Use the minus sign to indicate a decrease in the "Increase/(Decrease)" columns. If required, round percentages to one decimal place. Macklin Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 Line Item Description 20Y2 20Y1 Increase/ (Decrease) Amount Increase/ (Decrease) Percent Sales $662,501 $589,000 $Sales Sales % Cost of goods sold (466,200) (370,000) Cost of goods sold Cost of goods sold % Gross profit $196,301 $219,000 $Gross profit Gross profit % Selling expenses $(66,250) $(50,000) $Selling expenses Selling expenses % Administrative expenses (38,250) (31,000) Administrative expenses Administrative expenses % Total operating expenses $(104,500) $(81,000) $Total operating expenses Total operating expenses % Operating income $91,801 $138,000 $Operating income Operating income % Other revenue 3,073 2,500 Other revenue Other revenue % Income before income tax expense $94,874 $140,500 $Income before income tax expense Income before income tax expense % Income tax expense (26,600) (42,200) Income tax expense Income tax expense % Net income $68,274 $98,300 $Net income Net income % Question Content Area 2. Net income has fill in the blank 1 of 4 from 20Y1 to 20Y2. Sales have fill in the blank 2 of 4 ; however, the cost of goods sold has fill in the blank 3 of 4 at a faster rate than sales, causing the gross profit to fill in the blank 4 of 4 .