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Income statement data for Boone Company for two recent years ended December 31, are as follows: Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Income before income tax Income tax expenses Net income Current Year $844,800 728,000 $116,800 $35,380 32,500 $67,880 $48,920 19,600 $29,320 Previous Year $640,000 560,000 $80,000 $29,000 25,000 $54,000 $26,000 10,400 $15,600 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 Boone Company Comparative Income Statement For the Years Ended December 31 Current year Amount $844,800 Previous year Amount Increase (Decrease) Amount Increase (Decrease) Percent Sales $640,000Boone Company Comparative Income Statement For the Years Ended December 31 Current year Amount Previous year Amount Increase (Decrease) Amount Increase (Decrease) Percent Sales Cost of goods sold Gross proft Selling expenses Administrative expenses $844,800 728,000 $116,800 35,380 32,500 $67,880 $48,920 19,600 $29,320 $640,000 560,000 $80,000 29,000 25,000 $54,000 $26,000 10,400 $15,600 Total operating expenses Income before income tax Income tax expense Net income b. The net income for Boone Company increased by 87.9% between years. This increase was the combined result of an sales of 32% and in ▼ percentage in cost of goods sold. The cost of goods sold increased at a ▼ rate than the increase in sales, thus causing the percentage increase in gross profit to be than the percentage increase in sales

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Answer #1
Boone Company
Comparative Income Statement
For the Years Ended December 31, 20—
Current year Amount Previous year Amount Increase (Decrease) Amount Increase (Decrease) Percent
Sales $844,800 $640,000 $204,800 32.00%
Cost of goods sold 728000 560000 $168,000 30.00%
Gross profit $116,800 $80,000 $36,800 46.00%
Selling expenses 35380 29000 $6,380 22.00%
Administrative expenses 32500 25000 $7,500 30.00%
Total operating expenses $67,880 $54,000 $13,880 25.70%
Income before income tax $48,920 $26,000 $22,920 88.15%
Income tax expense $19,600 $10,400 $9,200 88.46%
Net income $29,320 $15,600 $13,720 87.95%
The net income for Boone Company increased by 87.9% between years. This increase was the combined result of an   in sales of 32% and   percentage   in cost of goods sold. The cost of goods sold increased at a   rate than the increase in sales, thus causing the percentage increase in gross profit to be than the percentage increase in sales.
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