Question

# Income statement data for Winthrop Company for two recent years ended December 31, are as follows:...

Income statement data for Winthrop Company for two recent years ended December 31, are as follows:

 Current Year Previous Year Sales \$838,200 \$660,000 Cost of goods sold 706,800 570,000 Gross profit \$131,400 \$90,000 Selling expenses \$38,610 \$33,000 Administrative expenses 35,000 28,000 Total operating expenses \$73,610 \$61,000 Income before income tax \$57,790 \$29,000 Income tax expenses 23,100 11,600 Net income \$34,690 \$17,400

a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. If required, round to one decimal place.

 Winthrop Company Comparative Income Statement For the Years Ended December 31 Current year Amount Previous year Amount Increase (Decrease) Amount Increase (Decrease) Percent Sales \$838,200 \$660,000 \$ % Cost of goods sold 706,800 570,000 % Gross profit \$131,400 \$90,000 \$ % Selling expenses \$38,610 \$33,000 \$ % Administrative expenses 35,000 28,000 % Total operating expenses \$73,610 \$61,000 \$ % Income before income tax \$57,790 \$29,000 \$ % Income tax expense 23,100 11,600 % Net income \$34,690 \$17,400 \$ %

 Winthrop Company Comparative Income Statement For the Years Ended December 31 Current Previous Increase Increase year year (Decrease) (Decrease) Amount Amount Amount Percent Sales 838200 660000 178200 27.0% Cost of goods sold 706800 570000 136800 24.0% Gross profit 131400 90000 41400 46.0% Selling expenses 38610 33000 5610 17.0% Administrative expenses 35000 28000 7000 25.0% Total operating expenses 73610 61000 12610 20.7% Income before income tax 57790 29000 28790 99.3% Income tax expense 23100 11600 11500 99.1% Net income 34690 17400 17290 99.4% Formula used: Increase (Decrease)Amount = Current year Amount - Previous year Amount Increase (Decrease) Percent= Increase (Decrease)Amount / Previous year Amount