Previous Year Current Year Sales $2,280,000 $2,000,000 Cost of goods sold Gross profit Selling expenses 1,960,000 1,750,000 $ 320,000 $ 156,500 $ 250,000 $ 125,000 Administrative expenses 122,000 100,000 $ 225,000 $ 25,000 $ 278,500 $ 41,500 Total operating expenses Income before income tax Income tax expense 16,600 10,000 $ 24,900 2$ Net income 15,000

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter5: The Income Statement And The Statement Of Cash Flows
Section: Chapter Questions
Problem 1RE: Brandt Corporation had sales revenue of 500,000 for the current year. For the year, its cost of...
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Income statement data for Winthrop Company for two recent years ended December 31 are as follows:

Please see  the attachment for details:

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?

Previous Year
Current Year
Sales
$2,280,000
$2,000,000
Cost of goods sold
Gross profit
Selling expenses
1,960,000
1,750,000
$ 320,000
$ 156,500
$ 250,000
$ 125,000
Administrative expenses
122,000
100,000
$ 225,000
$ 25,000
$ 278,500
$ 41,500
Total operating expenses
Income before income tax
Income tax expense
16,600
10,000
$ 24,900
2$
Net income
15,000
Transcribed Image Text:Previous Year Current Year Sales $2,280,000 $2,000,000 Cost of goods sold Gross profit Selling expenses 1,960,000 1,750,000 $ 320,000 $ 156,500 $ 250,000 $ 125,000 Administrative expenses 122,000 100,000 $ 225,000 $ 25,000 $ 278,500 $ 41,500 Total operating expenses Income before income tax Income tax expense 16,600 10,000 $ 24,900 2$ Net income 15,000
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