Honzontal 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 Gross profit $441,000 $350,000 372,000 300,000 $69,000 $50,000 Selling expenses $19,720 $17,000 Administrative expenses 17,360 14,000 Total operating expenses $37,080 $31,000 Income before income tax $31,920 $19,000 Income tax expenses 12,800 7,600 Net income $19,120 $11,400 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 Previous Increase Increase year year (Decrease) (Decrease) Amount Amount Amount Percent 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 Previous Increase Increase year (Decrease) (Decrease) Amount Amount Amount Percent Sales $441,000 $350,000 % Cost of goods sold 372,000 300,000 % Gross profit $69,000 $50,000 $ % Selling expenses Administrative expenses Total operating expenses Income before income tax $19,720 17,360 $17,000 $ 5 14,000 $37,080 $31,000 $31,920 $19,000 Income tax expense 12,800 7,600 Net income $19,120 $11.400 $ b. The net income for Winthrop Company increased between years. This increase was the combined result of an in cost of goods sold. The cost of goods sold increased at a the increase in sales, thus causing the percentage increase in gross profit to be percentage in sales and rate than than the percentage increase in sales percentage in in sales and rate than b. The net income for Winthrop Company increased between years. This increase was the combined result of an cost of goods sold. The cost of goods sold increased at a the increase in sales, thus causing the percentage increase in gross profit to be; than the percentage increase in sales