Income statement data for Scribe Paper Company for the year ended December 31, 2007 and 2006, are as follows:

a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for 2007 when compared with 2006. Round to two decimal places.
b. What conclusions can be drawn from the horizontalanalysis?

2007 $66,300 32,000 34,300 $24,000 7,500 31,500 2,800 1,000 1,800 2006 Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Income before income tax Income tax expense Net income $85,000 40,000 $45,000 $25,000 6,000 531,000 $14,000 6,000 8,000