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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 Sales $897,900 $730,000 774,400 Cost of goods sold 640,000 Gross profit $123,500 $90,000 Selling expenses $35,030 $31,000 Administrative expenses 31,460 26,000 Total operating expenses $66,490 $57,000 $57,010 Income before income tax $33,000 22,800 Income tax expenses 13,200 $34,210 $19,800 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 (Decrease) (Decrease) Percent Increase year Amount year Amount Amount Winthrop Company Comparative Income Statement For the Years Ended December 31 Current Previous Increase Increase (Decrease) (Decrease) Amount year Amount year Amount Percent Sales $897,900 $730,000 774,400 640,000 Cost of goods sold $123,500 $90,000 Gross profit Selling expenses $35,030 $31,000 26,000 31,460 Administrative expenses $66,490 $57,000 Total operating expenses Income before income tax $33,000 $57,010 22,800 13,200 Income tax expense $19,800 $34,210 % Net income = in sales and b. The net income for Winthrop Company increased between years. This increase was the combined result of an percentage in cost of goods sold. The cost of goods sold increased at a rate than the increase in sales, thus causing the percentage increase in gross profit to be than the percentage increase in sales

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 Sales $897,900 $730,000 774,400 Cost of goods sold 640,000 Gross profit $123,500 $90,000 Selling expenses $35,030 $31,000 Administrative expenses 31,460 26,000 Total operating expenses $66,490 $57,000 $57,010 Income before income tax $33,000 22,800 Income tax expenses 13,200 $34,210 $19,800 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 (Decrease) (Decrease) Percent Increase year Amount year Amount Amount Winthrop Company Comparative Income Statement For the Years Ended December 31 Current Previous Increase Increase (Decrease) (Decrease) Amount year Amount year Amount Percent Sales $897,900 $730,000 774,400 640,000 Cost of goods sold $123,500 $90,000 Gross profit Selling expenses $35,030 $31,000 26,000 31,460 Administrative expenses $66,490 $57,000 Total operating expenses Income before income tax $33,000 $57,010 22,800 13,200 Income tax expense $19,800 $34,210 % Net income = in sales and b. The net income for Winthrop Company increased between years. This increase was the combined result of an percentage in cost of goods sold. The cost of goods sold increased at a rate than the increase in sales, thus causing the percentage increase in gross profit to be than the percentage increase in sales

FINANCIAL ACCOUNTING
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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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 Sales $897,900 $730,000 774,400 Cost of goods sold 640,000 Gross profit $123,500 $90,000 Selling expenses $35,030 $31,000 Administrative expenses 31,460 26,000 Total operating expenses $66,490 $57,000 $57,010 Income before income tax $33,000 22,800 Income tax expenses 13,200 $34,210 $19,800 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 (Decrease) (Decrease) Percent Increase year Amount year Amount Amount
Transcribed Image Text: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 Sales $897,900 $730,000 774,400 Cost of goods sold 640,000 Gross profit $123,500 $90,000 Selling expenses $35,030 $31,000 Administrative expenses 31,460 26,000 Total operating expenses $66,490 $57,000 $57,010 Income before income tax $33,000 22,800 Income tax expenses 13,200 $34,210 $19,800 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 (Decrease) (Decrease) Percent Increase year Amount year Amount Amount
Winthrop Company Comparative Income Statement For the Years Ended December 31 Current Previous Increase Increase (Decrease) (Decrease) Amount year Amount year Amount Percent Sales $897,900 $730,000 774,400 640,000 Cost of goods sold $123,500 $90,000 Gross profit Selling expenses $35,030 $31,000 26,000 31,460 Administrative expenses $66,490 $57,000 Total operating expenses Income before income tax $33,000 $57,010 22,800 13,200 Income tax expense $19,800 $34,210 % Net income = in sales and b. The net income for Winthrop Company increased between years. This increase was the combined result of an percentage in cost of goods sold. The cost of goods sold increased at a rate than the increase in sales, thus causing the percentage increase in gross profit to be than the percentage increase in sales
Transcribed Image Text:Winthrop Company Comparative Income Statement For the Years Ended December 31 Current Previous Increase Increase (Decrease) (Decrease) Amount year Amount year Amount Percent Sales $897,900 $730,000 774,400 640,000 Cost of goods sold $123,500 $90,000 Gross profit Selling expenses $35,030 $31,000 26,000 31,460 Administrative expenses $66,490 $57,000 Total operating expenses Income before income tax $33,000 $57,010 22,800 13,200 Income tax expense $19,800 $34,210 % Net income = in sales and b. The net income for Winthrop Company increased between years. This increase was the combined result of an percentage in cost of goods sold. The cost of goods sold increased at a rate than the increase in sales, thus causing the percentage increase in gross profit to be than the percentage increase in sales
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