Lincoln Com pany Comparative Income Statement Decem ber 31. 2003 and 2002 Increase( Decrease) 2003 2002 Amount Percent Sales $1,530,500$1,234,000$296,50024.0% Sales returns 32.500 34,000(1,500)(4.4%) Net sales $1,498,000$1,200,000$29800)24.8% Cost of goods sold Gross profit Horizontal Analysis Selling expenses Current year(2003)$1,498,000=124.8% Administrative expenses Base year(2002) $1,200,000 Total operating expenses Operating income Increase amount $298,000 24.8% Other income Base year(2002)$1,200,000 other expense 6,00012,000 (6,000)(50.0% Income before income tax 162, 500 $ 134, 600 27, 900 20.7% Income tax 71,500 58,100 13,40023.1% Net income 91,000$762500$1450019.0% c15-6C15- 6 Lincoln Company Comparative Income Statement December 31, 2003 and 2002 Sales $1,530,500 $1,234,000 $296,500 24.0% Sales returns 32,500 34,000 (1,500) (4.4%) Net sales $1,498,000 $1,200,000 $298,000) 24.8% Cost of goods sold 1,043,000 820,000 223,000 27.2% Gross profit $ 455,000 $ 380,000 $ 75,000 19.7% Selling expenses $ 191,000 $ 147,000 $ 44,000 29.9% Administrative expenses 104,000 97,400 6,600 6.8% Total operating expenses $ 295,000 $ 244,400 $ 50,600 20.7% Operating income $ 160,000 $ 135,600 $ 24,400 18.0% Other income 8,500 11,000 (2,500) (22.7%) $ 168,500 $ 146,600 $ 21,900 14.9% Other expense 6,000 12,000 (6,000) (50.0%) Income before income tax $ 162,500 $ 134,600 $ 27,900 20.7% Income tax 71,500 58,100 13,400 23.1% Net income $ 91,000 $ 76,500 $ 14,500 19.0% Increase (Decrease) 2003 2002 Amount Percent Horizontal Analysis: Current year (2003) $1,498,000 Base year (2002) $1,200,000 = 124.8% Increase amount $298,000 Base year (2002) $1,200,000 = 24.8%