### Income Statement Analysis for Winthrop Company#### Income Statement Data for Two Recent Years Ended December 31**Current Year vs. Previous Year**- **Sales** - Current Year: \$907,200 - Previous Year: \$720,000- **Cost of Merchandise Sold** - Current Year: \$744,000 - Previous Year: \$600,000- **Gross Profit** - Current Year: \$163,200 - Previous Year: \$120,000- **Selling Expenses** - Current Year: \$47,560 - Previous Year: \$41,000- **Administrative Expenses** - Current Year: \$42,160 - Previous Year: \$34,000- **Total Operating Expenses** - Current Year: \$89,720 - Previous Year: \$75,000- **Income Before Income Tax Expense** - Current Year: \$73,480 - Previous Year: \$45,000- **Income Tax Expenses** - Current Year: \$29,480 - Previous Year: \$18,000- **Net Income** - Current Year: \$44,000 - Previous Year: \$27,000---### Task:a. **Prepare a Comparative Income Statement**- **Winthrop Company: Comparative Income Statement for the Years Ended December 31** - For each category (Sales, Cost of Merchandise Sold, etc.), calculate the increase or decrease in amount and percentage from the previous year to the current year.b. **Analysis of Net Income Increase**- Identify factors contributing to the increase in net income, such as increase in sales and percentage change in cost of merchandise sold.- Compare the rates of increase in sales and cost of merchandise sold to understand the net profit improvement.--- This analysis involves calculating the difference and percentage change for each financial category to understand trends and profitability improvements.

Answer: Current year Previous Year Increase/ Decrease Increase/ Decrease % Sales $…

Answered: come statement data for Winthrop…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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