Horizontal Analysis of the Income Statement Income statement data for Boone Company for two recent years ended December 31, are as follows: Current Year Previous Year Sales $435,600 $360,000 Cost of goods sold 368,900 310,000 Gross profit $66,700 $50,000 Selling expenses $18,870 $17,000 Administrative expenses 16,660 14,000 Total operating expenses $35,530 $31,000 Income before income tax $31,170 $19,000 Income tax expenses 12,500 7,600 Net income $18,670 $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. Boone Company Comparative Income Statement For the Years Ended December 31 Previous year Increase (Decrease) Amount Amount $360,000 310,000 Increase (Decrease) Percen 16 $50,000 % % Current year Amount Sales $435,600 Cost of goods sold 368,900 Gross profit $66,700 Selling expenses 18,870 Administrative expenses 16,660 Total operating expenses $35,530 Income before income $31,170 tax Income tax expense 12,960 Net income $18,670 17,000 14,000 $31,000 $19,000 7,600 $11,400 9 b. The net income for Boone Company increased by 63.8% between years. This increase was the combined result of an in sales of 21% and percentage in cost of goods sold. The cost of goods sold increased at a rate than the increase in sales, thus causing the percentage increase in gross profit to than the percentage increase in sales. be