reasons Income statement data for Winthrop Company for two recent years ended December 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 Seling expenses ${152,500) ${125.000) Administrative expenses (118,000) (100,000) Total operating expenses [270,500) $225,000) Income before income tax expense 544.500 $25.000 Income tax expense (17,800) (10,000) Net Income 3. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease for the current year when compared with the previous year. Frequired, round to one decimal place Winthrop Company Comparative Income Statement For the Year Ended December 31 Current Previous year Amount year Amount (Decrease) Amount (Decrease) Percent $2,240,000 $2,000,000 Sales Cost of goods sold (1,925.000 (1.750,000 Gross profit $315.000 $250,000 $(152,500) $125,000) Chapter 14 problem set Income tax expense llock (17,800) $26,700 (10,000 Net Income $15,000 a. Prepare a comparative Income Matement with horizontal analysis, indicating the increase (decrease for the current year when compared with the previous year I wed, round to one decimal place Winthrop Company Comparative Income Statement For the Year Ended December 31 ) Percent year Amount year Amount (Decrease) Amount (Dece 22.240,000 ,000,000 (1.925.000) (1,750,000) Cost of goods sold Selling expenses 125,000) (100,000 Administrative expenses Total Operating expenses $225,000 5(152,500) 118.000) [220.500) 144.500 (17.00) $26.700 Income before income tax expense $25,000 Income tax expense b. The net income for Winthrop Company increased between years. This increase was the combined result of an goods sold. The cost of goods sold increased at a rabe than the increase in sales, thus causing the percentage increase in gross profit to be an the percentage increase