Income statement data for Moreno 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. Round to one decimal place.
b. What conclusions can be drawn from the horizontal analysis?

Current Year Prevlous Year Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Income before income tax Income tax expense Net income 1,120,000 1,000,000 875,000 148,750 125,000 71,250 62,500 50,000 $ 127250 112500 21,500 12,500 5,000 500 S 7,500 971,250 56,000 8,000