Income statement data for Winthrop Company for two recent years ended December 31 are as follows: Current Year Previous Year Sales Cost of merchandise sold Gross profit $900,000 $750,000 760,500 650,000 $139,500 $100,000 Selling expenses $38,500 $35,000 Administrative expenses 34,220 29,000 Total operating expenses $72,720 $64,000 Income before income tax expense $66,780 $36,000 Income tax expenses 26,700 14,400 Net income $40,080 $21,600 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 Winthrop Company Comparative Income Statement For the Years Ended December 31 Current Previous year year Amount Amount Increase Increase (Decrease) (Decrease) Amount Percent Sales Cost of merchandise sold $900,000 $750,000 760,500 650,000 % % Gross profit $139,500 $100,000 % Selling expenses Administrative expenses $38,500 $35,000 $ % 34,220 29,000 % Total operating expenses $72,720 $64,000 % Income before income tax expense $66,780 $36,000 $ % Income tax expense 26,700 14,400 % Net income $40,080 $21,600 $ % b. The net income for Winthrop Company Increased between years. This increase was the combined result of an in sales and of merchandise sold increased at a gross profit to be, percentage in cost of merchandise sold. The cost rate than the increase in sales, thus causing the percentage increase in than the percentage increase in sales