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Combined result of an (increase, decrease) in sales

% and (lower, higher) percentage (increase, decrease) in cost of goods sold.

goods sold increased at a (slower, faster) rate than the increase

gross profit to be (less, greater) than

Income statement data for Winthrop Company for two recent years ended December 31 are as follows: 1 2 Sales Current Year $1,926,400.00 1,646,040.00 $280,360.00 $80,500.00 51,060.00 $131,560.00 $148,800.00 Previous Year $1,720,000.00 1,496,400.00 $223,600.00 $70,000.00 3 Cost of goods sold 4 Gross profit 5 Selling expenses 6 Administrative expenses 7 Total operating expenses 8 Income before income tax 9 Income tax expense 46,000.00 $116,000.00 $107,600.00 13,416.00 8,600.00 10 Net income $135,384.00 $99,000.00 A. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. Round percentages to one decimal place. B. What conclusions can be drawn from the horizontal analysis? Round the answers to one decimal place. Comparative Income Statement For the Years Ended December 31 1 Increase (Decrease) Amount Increase (Decrease) Percent 2 Current Year 3 Sales $1,926,400.00 4 Cost of goods sold 1,646,040.00 Previous Year $1,720,000.00 1,496,400.00 $223,600.00 $70,000.00 5 Gross profit $280,360.00 $80,500.00 6 Selling expenses 7 Administrative expenses 51,060.00 8 Total operating expenses 9 Income before income tax $131,560.00 $148,800.00 46,000.00 $116,000.00 $107,600.00 10 Income tax expense 13,416.00 8,600.00 11 Net income $135,384.00 $99,000.00 What conclusions can be drawn from the horizontal analysis ? Round the answers to one decimal place. in sales of The net income for Winthrop Company increased by % and percentage % between years. This increase was the combined result of an in cost of goods sold. rate than the increase in sales, thus causing the percentage increase in gross profit to be than the percentage The cost of goods sold increased at a increase in sales