(Increase/decrease, higher/lower, increse/decrase, slower/faster, greater/less)

Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent years ended December 31, are as follows Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Income before income tax Income tax expenses Net income Current Year $508,200 416,500 $91,700 $25,530 22,610 $48,140 $43,560 17,400 $26,160 Previous Year $420,000 350,000 $70,000 $23,000 19,000 $42,000 $28,000 11,200 $16,800 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 Previous Increase Increase year (Decrease) (Decrease) year Amount Amount Amount Percent $508,200 $420,000 416,500 350,000 591,700 $70,000 $25,530 $23,000 expenses 22,610 19,000 Total operating expenses $48,140 $42,000 Income before income tax $43,560 $28,000 11,200 25,160 $15,800 Cost of gcods sold Gross profit Selling expenses Administrative Income tax expense 17,400 Net income b. The net income for Winthrop Company increased between years. This increase was the combined result of an sold. The cost of goods sold increased at a in sales and in cost of goods rate than the increase in sales, thus causing the percentage increase in gross profit to be than the percentage increase in sales. Click to watch the Concept Clip Flying Off the Shelves video and then answer the questions below. 1. Why does a company need to turnover its inventory quickly? a. Taxes must be paid on both new and old inventory every year. b. Excess inventory decreases liquidity c. Inventory does not have to show on the books if turned quickly. d. A quick turnover will decrease employee overtime. 2. Which technology company has the fastest inventory turnover rate? a. Microsoft b. Dell c. Costco d. Apple 3. One of the reasons Costco has such a quick turnover rate is because it a. removes products that don't sell quickly. b. farms out all manufacturing of the products they sell c. sells the same products every year. d. only sells via the Internet