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Business
Accounting
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

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

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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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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