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Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent years ended December 31 are as follows: Current Year Previous Year Sales Cost of goods sold $2,240,000 (1,925,000) $315,000 $2,000,000 (1,750,000) Gross profit $250,000 Selling expenses $(152,500) (118,000) $(270,500) $(125,000) (100,000) Administrative expenses $(225,000) $44,500 $25,000 Total operating expenses Income before income tax expense Income tax expense Net income (17,800) $26,700 (10,000) $15,000 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 Previous Increase Increase year Amount year Amount (Decrease) Amount (Decrease) Percent $2,240,000 $2,000,000 $ (1,925,000) (1,750,000) Sales Cost of goods sold Gross profit $315,000 $250,000 Selling expenses $(125,000) $(152,500) (118,000) Administrative expenses (100,000) Total operating expenses $(270,500) $(225,000) $ Income before income tax expense $44,500 $25,000 Income tax expense (17,800) (10,000) Net income $26,700 $15,000

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