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 $598,000 $460,000 499,200 390,000 $98,800 $70,000 Selling expenses $30,000 $25,000 Administrative expenses 26,880 21,000 Total operating expenses $56,880 $46,000 Income before income tax expense $41,920 $24,000 Income tax expenses 16,800 9,600 Net income $25,120 $14,400