Horizontal Analysis of the Income Statement Income statement data for Winthrop C
ID: 2593827 • Letter: H
Question
Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent years ended December 31, are as follows Current Year $364,000 304,800 59,200 $18,000 15,360 Previous Year Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Income before income tax Income tax expenses Net income $280,000 240,000 $40,000 $15,000 "' $25,840 10,300 15,540 12,000 $27,000 $13,000 5,200 $7,800 a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous required, round to one decimal place. Winthrop Company Comparative Income Statement For the Years Ended December 31 Current Previous Increase Increase yearyear (Decrease) (Decrease) Amount Amount Amount Percent Sales $364,000 $280,000$ 84,000| | 23% 304,800 240,000 64,800 21 $40,000 19,200! Gross profit $59,200 Selling expenses 18,000 15,000 C 3,000 %Explanation / Answer
A.
Comparative income statement:
Sales
$364,000
$280,000
$84,000
30%
(84000/280000)
Cost of good sold
$304,800
$240,000
$64,800
27%
(64800/240,000)
Gross profit
$59,200
$40,000
$19,200
48%
(19200/40000)
20%
(3000/15,000)
28%
(3360/12000)
23.6%
(6360/27000)
98.8%
(12840/13000)
98.1%
(5100/5200)
Current year previous year increase(decrease) amount increase (decrease) percentSales
$364,000
$280,000
$84,000
30%
(84000/280000)
Cost of good sold
$304,800
$240,000
$64,800
27%
(64800/240,000)
Gross profit
$59,200
$40,000
$19,200
48%
(19200/40000)
Selling expenses $18,000 $15,000 $3,00020%
(3000/15,000)
Administrative expenses $15,360 $12,000 $3,36028%
(3360/12000)
Total operating expenses $33,360 $27,000 $6,36023.6%
(6360/27000)
Income before income tax $25,840 $13,000 $12,84098.8%
(12840/13000)
Income tax expense $10,300 $5,200 $510098.1%
(5100/5200)
Net income $15,540 $7,800 $7,740 99.2%Related Questions
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