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?

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