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 Gross profit Selling expenses Administrative expenses Total operating expenses Income before income tax Income tax expenses Net income $573,400 476,000 $97,400 $26,880 24,000 $50,880 $46,520 18,600 $27,920 $470,000 400,000 $70,000 $24,000 20,000 $44,000 $26,000 10,400 $15,600 a. Prepare a comparative income statement vith horizontal apalysis, indicating the increase (decrease) for the currs 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 $573,400 $470,000 Sales Cost of goods sold Gross profit 476.000 400,000 597,400 $70,000 s Net income $27,920 $15,600 a. Prepare a co mparative income statement with horizontal analysis, indicating the increase (decrease) for the current 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 Sales Cost of goods sold Gross profit Selling expenses Administrative expenses $573,400 $470,000 476,000 400,000 597,400 $70,000 526,880 $24,000 24,000 20,000 Total operating expenses 50,880 Income before income tax Income tax expense Net income $44bo 6.520 18,600 S26.000 10,400 S27.920 S15.600 b. The net income for Winthrop Company increazed bet tvyeen years. This increase was the combined result of an -in cost of goods sold, The percentage w in sales and -rate than the increase ie, sales, thus causing th. Percentage cost of goods sold increased at a increase in gross profit to be w than the percentage increase in sales