Income statement data for Winthrop Company for two recent years ended December 31, are as follows:

	Current Year			Previous Year
Sales	$817,400			$670,000
Cost of goods sold	666,400			560,000
Gross profit	$151,000			$110,000
Selling expenses	$42,560			$38,000
Administrative expenses	38,400			32,000
Total operating expenses	$80,960			$70,000
Income before income tax	$70,040			$40,000
Income tax expenses	28,000			16,000
Net income	$42,040			$24,000

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 year Amount	Previous year Amount	Increase (Decrease) Amount	Increase (Decrease) Percent
Sales	$817,400	$670,000	$fill in the blank 25149b017044053_1	fill in the blank 25149b017044053_2%
Cost of goods sold	666,400	560,000	fill in the blank 25149b017044053_3	fill in the blank 25149b017044053_4%
Gross profit	$151,000	$110,000	$fill in the blank 25149b017044053_5	fill in the blank 25149b017044053_6%
Selling expenses	$42,560	$38,000	$fill in the blank 25149b017044053_7	fill in the blank 25149b017044053_8%
Administrative expenses	38,400	32,000	fill in the blank 25149b017044053_9	fill in the blank 25149b017044053_10%
Total operating expenses	$80,960	$70,000	$fill in the blank 25149b017044053_11	fill in the blank 25149b017044053_12%
Income before income tax	$70,040	$40,000	$fill in the blank 25149b017044053_13	fill in the blank 25149b017044053_14%
Income tax expense	28,000	16,000	fill in the blank 25149b017044053_15	fill in the blank 25149b017044053_16%
Net income	$42,040	$24,000	$fill in the blank 25149b017044053_17	fill in the blank 25149b017044053_18%

b. The net income for Winthrop Company increased between years. This increase was the combined result of an in sales and percentage in cost of goods sold. The cost of goods sold increased at a rate than the increase in sales, thus causing the percentage increase in gross profit to be than the percentage increase in sales.