Income statement data for Winthrop Company for two recent years ended December 31 are as follows: Previous Year Current Year Sales $412,500 $330,000 Cost of merchandise sold 356,700 290,000 Gross profit $55,800 $40,000 Selling expenses $16,100 $14,000 Administrative expenses 14,760 12,000 Total operating expenses $30,860 $26,000 Income before income tax expense $24,940 $14,000 Income tax expenses 10,0০০ 5,600 Net income $14,940 $8,400 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 Previous Increase Increase year year (Decrease) (Decrease) Amount Amount Amount Percent Sales $412,500 $330,000 s Cost of merchandise sold 356,700 290.000 Gross profit $55,800 $40,000 Selling expenses $16,100 $14,000 s Administrative expenses 14,760 12,000 Total operating expenses $30.860 $26.000 Income before income tax expense $24,940 $14,000 Income tax expense 10,000 5,600 Net income $14,940 $8,400 S
Income statement data for Winthrop Company for two recent years ended December 31 are as follows: Previous Year Current Year Sales $412,500 $330,000 Cost of merchandise sold 356,700 290,000 Gross profit $55,800 $40,000 Selling expenses $16,100 $14,000 Administrative expenses 14,760 12,000 Total operating expenses $30,860 $26,000 Income before income tax expense $24,940 $14,000 Income tax expenses 10,0০০ 5,600 Net income $14,940 $8,400 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 Previous Increase Increase year year (Decrease) (Decrease) Amount Amount Amount Percent Sales $412,500 $330,000 s Cost of merchandise sold 356,700 290.000 Gross profit $55,800 $40,000 Selling expenses $16,100 $14,000 s Administrative expenses 14,760 12,000 Total operating expenses $30.860 $26.000 Income before income tax expense $24,940 $14,000 Income tax expense 10,000 5,600 Net income $14,940 $8,400 S
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Horizontal Analysis of the Income Statement
Income statement data for Wwinthrop Company for two recent years ended December 31 are as follows:
Current Year
Previous Year
Sales
$412,500
$330,000
Cost of merchandise sold
356,700
290,000
Gross profit
$55,800
$40,000
Selling expenses
$16,100
$14,000
Administrative expenses
14,760
12,000
Total operating expenses
$30,860
$26,000
Income before income tax expense
$24,940
$14,000
Income tax expenses
10,000
5,600
Net income
$14,940
$8,400
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 Previous
Increase
Increase
year
year
(Decrease) (Decrease)
Amount
Amount
Amount
Percent
Sales
$412,500
$330,000 $
Cost of merchandise sold
356,700
290,000
%
Gross profit
$55,800
$40,000
%
Selling expenses
$16,100
$14,000 $
%
Administrative expenses
14,760
12,000
Total operating expenses
$30,860
$26,000 s
Income before income tax expense
$24,940
$14,000 $
%
Income tax expense
10,000
5,600
Net income
$14,940
$8,400 $
%
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