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For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $14,000 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 2011 Sales $436,000 $507,000 238,290 Cost of goods sold 222,360 Gross profit $268,710 $213,640 Selling expenses $101,400 $82,840 Administrative expenses 55,770 56,680 Total operating expenses $157,170 $139,520 Income from operations $111,540 $ 74,120 Other income 20,280 13,080 Income before income tax $131,820 $87,200 Income tax expense 50,700 34,880 Net income $81,120 $52,320 Required: 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, 2012 and 2041 20Y2 Amount 20Y2 Percent 20Y1 Amount 20Y1 Percent Sales $507,000 % $436,000 % Cost of goods sold 238,290 % 222,360 10% Gross profit $268,710 % $213,640 % Selling expenses 101,400 % 82,840 % Administrative expenses 55,770 % 56,680 % % $139,520 % Total operating expenses $157,170 Income from operations $111,540 Other income 20,280 % $74,120 % % 13,080 % Income before income tax $131,820 % $87,200 % Income tax expense 50,700 % 34,880 % Net income $81,120 % $52,320 % 2. The vertical analysis indicates that the costs other than selling expenses (cost of goods sold and administrative expenses) The sales promotion campaign appears to have been While selling expenses as a percent of sales as a percentage of sales. As a result, net income as a percentage of sales slightly, the cost was more than made up for by sales.