Revenue and expense data for Young Technologies Inc. are as follows:
Year 2
Year 1
Sales
$500,000
$440,000
Cost of goods sold
$325,000
$242,000
Selling expense
$70,000
$79,200
Administrative expenses
$75,000
$70,400
Income tax expense
$10,500
$16,400
Required:
a. Prepare an income statement in comparative form, stating each item for both years as an amount and as a percent of sales. Round percentage amounts to the nearest whole percent.
Young Technologies Inc.
Comparative Income Statement
For the Years Ended December 31, Year 2 and Year 1
Year 2 Amount
Year 2 Percent
Year 1 Amount
Year 1 Percent
Sales
$500,000
100%
$440,000
100%
Cost of goods sold
$325,000
65%
$242,000
55%
Selling expense
$70,000
14%
$79,200
18%
Administrative expenses
$75,000
15%
$70,400
16%
Income tax expense
$10,500
2%
$16,400
4%
Total expenses
$480,500
96%
$407,000
93%
Net income
$19,500
4%
$33,000
7%
b. Comment on the significant changes disclosed by the comparative income statement.