Income statement data for Web-pics Company for the years ended December 31, 2008 and 2007, are as follows:

a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for 2008 when compared with 2007. Round to one decimal place.
b. What conclusions can be drawn from the horizontalanalysis?

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2008 2007 Sales Cost of goods sold $117,000 150,000 70,000 S61,000 80,000 $ 36,000 37,500 10,000 48,500 47,500 Income before income tax 12,500 32,500 10,000 22,500 56,000 Gross profit Selling expenses Administrative expenses Total operating expenses 12,500 Income tax expense Net income 2,000 S 10,500 22