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McDade Company reported a decline in net income. At the end of the year, T. Burrows, the president, is presented with the following condensed comparative income statement: McDade Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 2041 2012 20Y1 Sales $818,220 $741,000 Cost of goods sold 573,400 470,000 Gross profit $244,820 $271,000 $79,050 $62,000 Selling expenses Administrative expenses 46,720 39,000 $125,770 $101,000 Total operating expenses Income from operations $119,050 $170,000 Other income 3,782 3,100 Income before income tax $122,832 $173,100 Income tax expense 34,400 51,900 Net income $88,432 $121,200 Required: 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 “Difference” columns. If required, round to one decimal place. McDade Company Comparative Income Statement For the Years Ended December 31, 2012 and 2041 20Y2 20Y1 Difference – Amount Difference – Percent Sales $818,220 $741,000 $ % Cost of goods sold 573,400 470,000 % Gross profit $244,820 $271,000 % Selling expenses $79,050 $62,000 19% Administrative expenses 46,720 39,000 1% $125,770 $101,000 % Total operating expenses Income from operations $119,050 $170,000 $ % Other income 3,782 3,100 % Income before income tax $122,832 $173,100 $ 10% Income tax expense 34,400 51,900 10% Net income $88,432 $121,200 10% 2. Net income has from 20Y1 to 2042. Sales have ; however, the cost of goods sold has », causing the gross profit to