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 $965,200 $760,000 Cost of goods sold 818,400 660,000 Gross profit $146,800 $100,000 Selling expenses $43,290 $37,000 Administrative expenses 38,750 31,000 Total operating expenses $82,040 $68,000 Income before income tax $64,760 $32,000 Income tax expenses 25,900 12,800 Net income $38,860 $19,200 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 $965,200 $760,000 s Sales % Cost of goods sold 818,400 660,000 Gross profit $146,800 $100,000 Selling expenses $43,290 $37,000 % Administrative expenses 38,750 31,000 Total operating expenses $82,040 $68,000 % Income before income tax $64,760 $32,000 $ % Income tax expense 25,900 12,800 % Net income $38,860 $19,200

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 $965,200 $760,000 Cost of goods sold 818,400 660,000 Gross profit $146,800 $100,000 Selling expenses $43,290 $37,000 Administrative expenses 38,750 31,000 Total operating expenses $82,040 $68,000 Income before income tax $64,760 $32,000 Income tax expenses 25,900 12,800 Net income $38,860 $19,200 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 $965,200 $760,000 s Sales % Cost of goods sold 818,400 660,000 Gross profit $146,800 $100,000 Selling expenses $43,290 $37,000 % Administrative expenses 38,750 31,000 Total operating expenses $82,040 $68,000 % Income before income tax $64,760 $32,000 $ % Income tax expense 25,900 12,800 % Net income $38,860 $19,200

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 39E: Cuneo Companys income statements for the last 3 years are as follows: Refer to the information for...

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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
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