Horizontal Analysis of the Income Statement Income statement data for Moreno Company for two recent years ended December 31, are as follows: Current Year Previous Year Sales $1,120,000 $1,000,000 Cost of goods sold 971,250 875,000 Gross profit $148,750 $125,000 Selling expenses $71,250 $62,500 Administrative expenses 56,000 50,000 Total operating expenses $127,250 $112,500 Income before income tax $21,500 $12,500 Income tax expenses 8,000 5,000 Net income $13,500 $7,500 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. Enter all amounts as positive numbers. Moreno Company Comparative Income Statement For the Years Ended December 31, 20 Current year Amount Previous year Amount Increase (Decrease) Amount Increase (Decrease) Percent Sales $1120000 $1000000 $ % Cost of goods sold 971250 875000 % Gross profit $148750 $125000 $ % Selling expenses 71250 62500 % Administrative expenses 56000 50000 % Total operating expenses $127250 $112500 $ % Income before income tax 21500 12500 % Income tax expense 8,000 5,000 % Net income $13500 $7500 $ % b. The net income for Moreno Company increased by approximately 80% between years. This increase was the combined result of an in sales of 12% and percentage in cost of goods sold.