PR 14-2A Vertical analysis of income statement Obj. 2 For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $50,000 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, 20Y2 and 2041 2012 Sales ................ $1,500,000 Cost of goods sold......... 510,000 Gross profit........... $ 990,000 Selling expenses ........... $ 270,000 Administrative expenses........ 180,000 Total operating expenses .............................. $ 450,000 Income from operations ......... . .......... $ 540,000 Other income ......................... ...+++++ 60,000 Income before income tax ........... $ 600,000 Income tax expense 450,000 Net income....... $ 150,000 2011 $1,250,000 475,000 $ 775,000 $ 200,000 156,250 $ 356,250 $ 418,750 50,000 $468,750 375,000 $ 93,750 (Continued) Chapter 14 Financial Statement Analysis Instructions 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. (Round percentages to one decimal place.) To the extent the data permit, comment on the significant relationships revealed by the vertical analysis prepared in (1)