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Income statement data for Winthrop Company for two recent years ended December 31 are as follows: Current Year Previous Year Sales $2,240,000 $2,000,000 Cost of
Income statement data for Winthrop Company for two recent years ended December 31 are as follows:
Current Year | Previous Year | ||||
Sales | $2,240,000 | $2,000,000 | |||
Cost of goods sold | (1,925,000) | (1,750,000) | |||
Gross profit | $315,000 | $250,000 | |||
Selling expenses | $(152,500) | $(125,000) | |||
Administrative expenses | (118,000) | (100,000) | |||
Total operating expenses | $(270,500) | $(225,000) | |||
Income before income tax expense | $44,500 | $25,000 | |||
Income tax expense | (17,800) | (10,000) | |||
Net income | $26,700 | $15,000 |
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 | $2,240,000 | $2,000,000 | $ | % |
Cost of goods sold | (1,925,000) | (1,750,000) | % | |
Gross profit | $315,000 | $250,000 | $ | % |
Selling expenses | $(152,500) | $(125,000) | % | |
Administrative expenses | (118,000) | (100,000) | % | |
Total operating expenses | $(270,500) | $(225,000) | $ | % |
Income before income tax expense | $44,500 | $25,000 | $ | % |
Income tax expense | (17,800) | (10,000) | % | |
Net income | $26,700 | $15,000 | $ | % |
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