a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. If required, round to one decimal place. Winthrop Company Comparative Income Statement For the Years Ended December 31 Current Previous Increase Increase Sales year year (Decrease) (Decrease) Amount Amount Amount Percent $384,000 $300,000 % Cost of merchandise sold 327,600 260,000 % Gross profit $56,400 $40,000 % Selling expenses $16,520 $14,000 $ % Administrative expenses 15,120 12,000 % Total operating expenses $31,640 $26,000 % Income before income tax expense $24,760 $14,000 % Income tax expense 9,900 5,600 % Net income $14,860 $8,400 % percentage b. The net income for Winthrop Company increased between years. This increase was the combined result of an in cost of merchandise sold. The cost of merchandise sold increased at a increase in sales, thus causing the percentage increase in gross profit to be in sales and rate than the than the percentage increase in sales