Income statement data for Winthrop Company for two recent years ended December 31, are as follows: Current Year Previous Year Sales $418,200 $340,000 Cost of goods sold 350,900 290,000 Gross profit $67,300 $50,000 Selling expenses $19,210 $17,000 Administrative expenses 16,940 14,000 Total operating expenses $36,150 $31,000 Income before income tax $31,150 $19,000 Income tax expenses 12,500 7,600 Net income $18,650 $11,400 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 year Amount Previous year Amount Increase (Decrease) Amount Increase (Decrease) Percent Sales $418,200 $340,000 $fill in the blank ad4c3afcb05e034_1 fill in the blank ad4c3afcb05e034_2% Cost of goods sold 350,900 290,000 fill in the blank ad4c3afcb05e034_3 fill in the blank ad4c3afcb05e034_4% Gross profit $67,300 $50,000 $fill in the blank ad4c3afcb05e034_5 fill in the blank ad4c3afcb05e034_6% Selling expenses $19,210 $17,000 $fill in the blank ad4c3afcb05e034_7 fill in the blank ad4c3afcb05e034_8% Administrative expenses 16,940 14,000 fill in the blank ad4c3afcb05e034_9 fill in the blank ad4c3afcb05e034_10% Total operating expenses $36,150 $31,000 $fill in the blank ad4c3afcb05e034_11 fill in the blank ad4c3afcb05e034_12% Income before income tax $31,150 $19,000 $fill in the blank ad4c3afcb05e034_13 fill in the blank ad4c3afcb05e034_14% Income tax expense 12,500 7,600 fill in the blank ad4c3afcb05e034_15 fill in the blank ad4c3afcb05e034_16% Net income $18,650 $11,400 $fill in the blank ad4c3afcb05e034_17 fill in the blank ad4c3afcb05e034_18% b. The net income for Winthrop Company increased between years. This increase was the combined result of an in sales and 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.

Income statement data for Winthrop Company for two recent years ended December 31, are as follows: Current Year Previous Year Sales $418,200 $340,000 Cost of goods sold 350,900 290,000 Gross profit $67,300 $50,000 Selling expenses $19,210 $17,000 Administrative expenses 16,940 14,000 Total operating expenses $36,150 $31,000 Income before income tax $31,150 $19,000 Income tax expenses 12,500 7,600 Net income $18,650 $11,400 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 year Amount Previous year Amount Increase (Decrease) Amount Increase (Decrease) Percent Sales $418,200 $340,000 $fill in the blank ad4c3afcb05e034_1 fill in the blank ad4c3afcb05e034_2% Cost of goods sold 350,900 290,000 fill in the blank ad4c3afcb05e034_3 fill in the blank ad4c3afcb05e034_4% Gross profit $67,300 $50,000 $fill in the blank ad4c3afcb05e034_5 fill in the blank ad4c3afcb05e034_6% Selling expenses $19,210 $17,000 $fill in the blank ad4c3afcb05e034_7 fill in the blank ad4c3afcb05e034_8% Administrative expenses 16,940 14,000 fill in the blank ad4c3afcb05e034_9 fill in the blank ad4c3afcb05e034_10% Total operating expenses $36,150 $31,000 $fill in the blank ad4c3afcb05e034_11 fill in the blank ad4c3afcb05e034_12% Income before income tax $31,150 $19,000 $fill in the blank ad4c3afcb05e034_13 fill in the blank ad4c3afcb05e034_14% Income tax expense 12,500 7,600 fill in the blank ad4c3afcb05e034_15 fill in the blank ad4c3afcb05e034_16% Net income $18,650 $11,400 $fill in the blank ad4c3afcb05e034_17 fill in the blank ad4c3afcb05e034_18% b. The net income for Winthrop Company increased between years. This increase was the combined result of an in sales and 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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

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	$418,200		$340,000
Cost of goods sold	350,900		290,000
Gross profit	$67,300		$50,000
Selling expenses	$19,210		$17,000
Administrative expenses	16,940		14,000
Total operating expenses	$36,150		$31,000
Income before income tax	$31,150		$19,000
Income tax expenses	12,500		7,600
Net income	$18,650		$11,400

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 year Amount	Previous year Amount	Increase (Decrease) Amount	Increase (Decrease) Percent
Sales	$418,200	$340,000	$fill in the blank ad4c3afcb05e034_1	fill in the blank ad4c3afcb05e034_2%
Cost of goods sold	350,900	290,000	fill in the blank ad4c3afcb05e034_3	fill in the blank ad4c3afcb05e034_4%
Gross profit	$67,300	$50,000	$fill in the blank ad4c3afcb05e034_5	fill in the blank ad4c3afcb05e034_6%
Selling expenses	$19,210	$17,000	$fill in the blank ad4c3afcb05e034_7	fill in the blank ad4c3afcb05e034_8%
Administrative expenses	16,940	14,000	fill in the blank ad4c3afcb05e034_9	fill in the blank ad4c3afcb05e034_10%
Total operating expenses	$36,150	$31,000	$fill in the blank ad4c3afcb05e034_11	fill in the blank ad4c3afcb05e034_12%
Income before income tax	$31,150	$19,000	$fill in the blank ad4c3afcb05e034_13	fill in the blank ad4c3afcb05e034_14%
Income tax expense	12,500	7,600	fill in the blank ad4c3afcb05e034_15	fill in the blank ad4c3afcb05e034_16%
Net income	$18,650	$11,400	$fill in the blank ad4c3afcb05e034_17	fill in the blank ad4c3afcb05e034_18%

b. The net income for Winthrop Company increased between years. This increase was the combined result of an in sales and 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.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.