EX 17-5 Horizontal analysis of the income statement OBJ. 2 Income statement data for Winthrop Company for two recent years ended December 31 are as follows: Sales Current Year Prior Year $2,280,000 $2,000,000 Cost of merchandise sold Gross profit Selling expenses Administrative expenses Total operating expenses Income before income tax expense Income tax expense Net income 1,960,000 1,750,000 $ 320,000 $ 250,000 $ 156,500 $ 125,000 122,000 100,000 $ 278,500 $225,000 $ 41,500 16,600 $ 25,000 10,000 $ 24,900 $ 15,000 a. Prepare a comparative income statement with horizontal analysis, indicating the in- crease (decrease) for the current year when compared with the prior year. Round percentages to one decimal place. b. What conclusions can be drawn from the horizontal analysis?