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 merchandise sold Gross profit $806,400 $640,000 664,200 540,000 $142,200 $100,000 Selling expenses $41,760 $36,000 Administrative expenses 37,200 30,000 Total operating expenses $78,960 $66,000 Income before income tax expense $63,240 $34,000 Income tax expenses 25,300 13,600 Net income $37,940 $20,400