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 $419,100 $330,000 280,000 Cost of goods sold 347,200 Gross profit $71,900 $50,000 $21,060 $18,000 Selling expenses Administrative expenses 18,750 15,000 $39,810 $33,000 Total operating expenses $17,000 Income before income tax $32,090 12,800 6,800 Income tax expenses $10,200 $19,290 Net income the rent 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 Sales $419,100 $330,000 $ % Cost of goods sold 347,200 280,000 % Gross profit $71,900 $50,000 $ 9 $21.060 Selling expenses 96 $18.000 $ Administrative expenses 18.750 15.000 $39.810 333.000 Total Operating expenses Income before income tax $32.090 517.000 12.500 6.30 Income tax expense 119.29 $10.200 in sales and rate than the b. The net income for Winthrop Company increased between years. This increase was the combined result of an percentage in cost of goods sold. The cost of goods sold increased at a increase in sales, thus causing the percentage increase in gross profit to be than the percentage increase in sales