Income statement data for Winthrop Company for two recent years ended December 31 are as follows: 1 Current Year Previous Year 2 Sales $1,926,400.00 $1,720,000.00 3 Cost of goods sold 1,646,040.00 1,496,400.00 4 Gross profit $280,360.00 $223,600.00 5 Selling expenses $80,500.00 $70,000.00 6 Administrative expenses 51,060.00 46,000.00 7 Total operating expenses $131,560.00 $116,000.00 8 Income before income tax $148,800.00 $107,600.00 9 Income tax expense 13,416.00 8,600.00 10 Net income $135,384.00 $99,000.00 A. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. Round percentages to one decimal place. B. What conclusions can be drawn from the horizontal analysis? Round the answers to one decimal place. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. Round percentages to one decimal place. Winthrop Company Comparative Income Statement For the Years Ended December 31 Increase Increase (Decrease) (Decrease) Percent 2 Current Year Previous Year Amount 3 Sales $1,926,400.00 $1,720,000.00 Cost of goods sold 1,646,040.00 1,496,400.00 5 Gross profit $280,360.00 $223,600.00 6 Selling expenses $80,500.00 $70,000.00 7 Administrative expenses 51,060.00 46,000.00 8 Total operating expenses $131,560.00 $116,000.00 9 Income before income tax $148,800.00 $107,600.00 10 Income tax expense 13,416.00 8,600.00 11 Net income $135,384.00 $99,000.00 Final Question What conclusions can be drawn from the horizontal analysis? Round the answers to one decimal place. The net income for Winthrop Company increased by % between years. This increase was the combined result of an in sales of % 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