For 20Y2, Macklin Inc. reported a significant increase 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 20Y2 20Y1 Sales $910,000 $700,000 Cost of goods sold (441,000) (350,000) Gross profit $469,000 $350,000 Selling expenses $(139,150) $(115,000) Administrative expenses (99,450) (85,000) Total operating expenses $(238,600) $(200,000) Operating income $230,400 $150,000 Other revenue 65,000 50,000 Income before income tax expense $295,400 $200,000 Income tax expense (65,000) (50,000) Net income $230,400 $150,000 Required:
Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y1 as the base year.
Macklin Inc. Comparative Income Statement For the Years Ended December 31, 2012 and 2041 Increase! Increase/ (Decrease) (Decrease) 20Y2 20Y1 Amount Percent Sales $745,858 $646,000 % Cost of goods sold (541,200) (410,000) % Gross profit $204,658 $236,000 $ % Selling expenses $(75,600) $(54,000) % Administrative expenses (43,790) (34,000) Total operating expenses $(119,390) $(88,000) % Operating income $85,268 $148,000 % Other revenue 3,410 2,700 % Income before income tax expense % $88,678 (24,800) $150,700 (45,200) Income tax expense % Net income $63,878 $105,500 %