Horizontal Analysis of the Income Statement Income statement data for Boone Company for two recent years ended December 31, are as follows: Current Year Previous Year $350,000 292,800 Sales Cost of goods sold Gross profit Selling expenses Administrative expenses $57,200 $16,100 14,760 $280,000 240,000 $40,000 $14,000 12,000 $26,000 $14,000 5,600 Total operating expenses Income before income tax $30,860 $26,340 10,500 Income tax expenses $15,840 $8,400 Net Income a. Prepare a comparative Income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. It required, round to one decimal place Boone Company Comparative Income Statement For the Years Ended December 31 Current year Amount Previous year Amount increase (Decrease) Amount Increase (Decrease) Percent Sales $350,000 $280,000 Cost of goods sold 292,800 240,000 16 Gross profit $57,200 $40,000 6 come before income tax $26,590 UU ncome tax expenses 10,500 5,600 $15,840 $8,400 det income 2. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the required, round to one decimal place. Boone Company Comparative Income Statement For the Years Ended December 31 Current year Amount Previous year Amount Increase (Decrease) Amount Increase (Decrease) Percent Sales $350,000 $280,000 % Cost of goods sold 292,800 240,000 % Gross profit $57,200 $40,000 % 14,000 % 12,000 % $26,000 % Selling expenses 16,100 Administrative expenses 14,760 Total operating expenses $30,860 Income before income tax $26,340 Income tax expense 10,500 Net income $15,840 $14,000 % 5,600 % $8,400 % in sales of 2596 b. The net income for Boone Company Increased by 88.6% between years. This increase was the combined result of an increase percentage increase In cost of goods sold. The cost of goods sold increased at a slower rate than the increase in sales, thus causing the per in gross profit to be greater than the percentage increase in sales. Check My Work 2 more Check My Work uses remaining