For $20$Y$2,$ Tri$-$Comic Company initiated a sales promotion campaign that included the expenditure of an additional $$13,000$ 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 $31,20$Y$2$ and $20$Y$1$

$20$Y$220$Y$1$

Sales $$468,000$ $$402,000$

Cost of merchandise sold $215,280205,020$

Gross profit $$252,720$ $$196,980$

Selling expenses $$93,600$ $$76,380$

Administrative expenses $51,48052,260$

Total operating expenses $$145,080$ $$128,640$

Income from operations $$107,640$ $$68,340$

Other revenue $14,04016,080$

Income before income tax expense $$121,680$ $$84,420$

Income tax expense $46,80032,160$

Net income $$74,880$ $$52,260$

Required:

Question Content Area

$1.$ 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 $31,20$Y$2$ and $20$Y$1$

$20$Y$2$

Amount $20$Y$2$

Percent $20$Y$1$

Amount $20$Y$1$

Percent

Sales $$468,000$ fill in the blank $2$f$889$c$00$d$03$b$06$c$\_1$

$\%$ $$402,000$ fill in the blank $2$f$889$c$00$d$03$b$06$c$\_2$

$\%$

Cost of merchandise sold $215,280$ fill in the blank $2$f$889$c$00$d$03$b$06$c$\_3$

$\%205,020$ fill in the blank $2$f$889$c$00$d$03$b$06$c$\_4$

$\%$

Gross profit $$252,720$ fill in the blank $2$f$889$c$00$d$03$b$06$c$\_5$

$\%$ $$196,980$ fill in the blank $2$f$889$c$00$d$03$b$06$c$\_6$

$\%$

Selling expenses $$93,600$ fill in the blank $2$f$889$c$00$d$03$b$06$c$\_7$

$\%$ $$76,380$ fill in the blank $2$f$889$c$00$d$03$b$06$c$\_8$

$\%$

Administrative expenses $51,480$ fill in the blank $2$f$889$c$00$d$03$b$06$c$\_9$

$\%52,260$ fill in the blank $2$f$889$c$00$d$03$b$06$c$\_10$

$\%$

Total operating expenses $$145,080$ fill in the blank $2$f$889$c$00$d$03$b$06$c$\_11$

$\%$ $$128,640$ fill in the blank $2$f$889$c$00$d$03$b$06$c$\_12$

$\%$

Income from operations $$107,640$ fill in the blank $2$f$889$c$00$d$03$b$06$c$\_13$

$\%$ $$68,340$ fill in the blank $2$f$889$c$00$d$03$b$06$c$\_14$

$\%$

Other revenue $14,040$ fill in the blank $2$f$889$c$00$d$03$b$06$c$\_15$

$\%16,080$ fill in the blank $2$f$889$c$00$d$03$b$06$c$\_16$

$\%$

Income before income tax expense $$121,680$ fill in the blank $2$f$889$c$00$d$03$b$06$c$\_17$

$\%$ $$84,420$ fill in the blank $2$f$889$c$00$d$03$b$06$c$\_18$

$\%$

Income tax expense $46,800$ fill in the blank $2$f$889$c$00$d$03$b$06$c$\_19$

$\%32,160$ fill in the blank $2$f$889$c$00$d$03$b$06$c$\_20$

$\%$

Net income $$74,880$ fill in the blank $2$f$889$c$00$d$03$b$06$c$\_21$

$\%$ $$52,260$ fill in the blank $2$f$889$c$00$d$03$b$06$c$\_22$

$\%$

Question Content Area

$2.$ The vertical analysis indicates that the costs other than selling expenses $($cost of merchandise sold and administrative expenses$)$

as a percentage of sales. As a result, net income as a percentage of sales

$.$ The sales promotion campaign appears to have been

$.$ While selling expenses as a percent of sales

slightly, the

cost was more than made up for by

sales.