Horizontal Analysis of th? Income Statement Income statement data for Winthrop C
ID: 2390567 • Letter: H
Question
Horizontal Analysis of th? Income Statement Income statement data for Winthrop Company for two recent years ended December 31, are as follows: Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Income before income tax Income tax expenses Net income Current Year $756,400 648,000 $108,400 $30,240 27,600 $57,840 $50,560 20,200 $30,360 Previous Year $620,000 540,000 $80,000 $27,000 23,000 $50,000 $30,000 12,000 $18,000 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 placeExplanation / Answer
Dear Student Thank you for using Chegg Please find below the answer Winthrop company Comparative income statement for the years ended December 31 Paticulars Current Year Amount Previous year Amount Increase (Decrease) Amount Increase (Decrease) Percent Sales 756,400.00 620,000.00 136,400.00 22.00% Cost of goods sold 648,000.00 540,000.00 108,000.00 20.00% Gross profit 108,400.00 80,000.00 28,400.00 35.50% Selling expenses 30,240.00 27,000.00 3,240.00 12.00% Administrative expenses 27,600.00 23,000.00 4,600.00 20.00% Total operating expenses 57,840.00 50,000.00 7,840.00 15.68% Income before income tax 50,560.00 30,000.00 20,560.00 68.53% Income tax expense 20,200.00 12,000.00 8,200.00 68.33% Net Income 30,360.00 18,000.00 12,360.00 68.67% The net income for Winthrop company increased by 68.7% between years. This increase was combined result of an increase in sales of 22%and 20% increase in cost of goods sold. The cost of goods sold increased at a lower rate than the increase in sales Thus causing the percentage increase in gross profit to be higher than the percentage increase in sales
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.