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 $739,200 $560,000 637,000 490,000 $102,200 $70,000 $31,720 $26,000 Administrative expenses 27,300 21,000 Total operating expenses $59,020 $47,000 Income before income tax $43,180 $23,000 Income tax expenses Net income 17,300 $25,880 9,200 $13,800 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 $739,200 $560,000 % Cost of goods sold 637,000 490,000 % Gross profit $102,200 $70,000 % % Selling expenses Administrative expenses Total operating expenses Income before income tax Income tax expense $31,720 $26,000 27,300 21,000 % $59,020 $47,000 % % $43,180 $23,000 17,300 9,200 % Net income $25,880 $13,800 % b. The net income for Winthrop Company increased between years. This increase was the combined result of an goods sold increased at a in sales and rate than the increase in sales, thus causing the percentage increase in gross profit to be percentage than the percentage increase in sales. in cost of goods sold. The cost of