Income statement data for Winthrop Company for two recent years ended December 3

Question

Income statement data for Winthrop Company for two recent years ended December 31, are as follows:

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.

    Current Year     Previous Year Sales $972,800 $760,000 Cost of goods sold 819,000 650,000 Gross profit $153,800 $110,000 Selling expenses $44,840 $38,000 Administrative expenses 40,320 32,000 Total operating expenses $85,160 $70,000 Income before income tax $68,640 $40,000 Income tax expenses 27,500 16,000 Net income $41,140 $24,000

Explanation / Answer

Dear Student Thank you for using Chegg Winthrop Company Please find below the answer Comparative Income Statement Statementshowing Computations For the Years Ended December 31 Paticulars Current year Amount Previous year Amount Increase (Decrease) Amount Increase (Decrease) Percent Sales                972,800.00            760,000.00            212,800.00 28.0% Cost of goods sold                819,000.00            650,000.00            169,000.00 26.0% Gross profit                153,800.00            110,000.00              43,800.00 39.8% Selling expenses                  44,840.00              38,000.00                6,840.00 18.0% Administrative expenses                  40,320.00              32,000.00                8,320.00 26.0% Total operating expenses                  85,160.00              70,000.00              15,160.00 21.7% Income before income tax                  68,640.00              40,000.00              28,640.00 71.6% Income tax expense                  27,500.00              16,000.00              11,500.00 71.9% Net income                  41,140.00              24,000.00              17,140.00 71.4%

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