Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent years ended December 31 are as follows: Current Year Previous Year $700,000 Sales Cost of merchandise sold Gross profit 590,000 $875,000 719,800 $155,200 $44,850 40,590 $110,000 $39,000 Selling expenses Administrative expenses 33,000 $72,000 Total operating expenses Income before income tax expense 585,440 $69,760 27,900 $38,000 15,200 $22,800 Income tax expenses $41,860 Net Income 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 year (Decrease) (Decrease) Amount Amount Amount Percent Sales $875,000 $700,000 $ 4 719,800 Cost of merchandise sold % 590,000 Gross profit $155,200 $110,000 Previous Next Total operating expenses $72,000 Income before income tax expense Income tax expenses $85,440 $69,760 27,900 $38,000 15,200 $22,800 Net Income $41,860 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 year (Decrease) (Decrease) Amount Amount Amount Percent Sales $575,000 $700,000 % Cost of merchandise sold 719,800 590,000 Gross profit $155,200 $110,000 Selling expenses $44,850 $39,000 Administrative expenses 40,590 33,000 Total operating expenses $85,440 $72,000 $ Income before income tax expense $69,760 $38,000 Income tax expense 27,900 15,200 Net Income $41,560 $22,000