Perform a Horizontal Analysis for the Entry "Sales Returns and Allowances

Perform a horizontal analysis for the entry "Sales Returns and Allowances" shown on the income statement portion below. (Round to the nearest tenth) $\begin{array}{c}\begin{array}{lll}\\\\ \hline\text { Revenue}\\ \text { Gross Sales}\\ \text { Less: Sales Returns and Allowances Net Sales}\\\text { Net Sales }\\ \text { Cost of Good Sold }\\ \text { Merchandise Inventory, Jan. 1 }\\ \text {Net purchases}\\ \text { Rent and Utilities}\\ \text { Goods Available for Sale }\\ \text { Less: Merchandise Inventory, Dec. 31}\\ \text { Cost of Goods Sold}\\ \text {Gross Margin }\end{array}\begin{array}{lll}\\2012\\ \hline \\\$ 170,000 \\6,100 \\163,900 \\\\\\34,000 \\72,900 \\106,900 \\86,500 \\20,400 \\\$ 143,500 \\ \end{array}\begin{array}{lll}\\2011\\ \hline\\\$ 205,700 \\4,300 \\201,400 \\\\\\30,600 \\70,000 \\100,600 \\60,600 \\40,000 \\\$ 161,400 \end{array}\begin{array}{lll} \text { Increase/Decrease }\\ \text { Amount Percent}\\ \hline\\ \\ \\ \\\\\\\\\\\\\\\\\\\end{array}\end{array}$

A) 1.3%
B) 3.7%
C) 12.8%
D) 41.9%