Income statements for Fanning Company for Year 3 and Year 4 follow. FANNING COMPANY Income Statements...

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Income statements for Fanning Company for Year 3 and Year 4 follow. FANNING COMPANY Income Statements Year 4. Sales $200,200 Year 3 $180,200 Cost of goods sold. 143,800 121,800 Selling expenses 20,500 18,500 Administrative expenses 12,500 14,500 Interest expense 3,500 5,500 Total expenses $180,300 $160,300 Income before taxes Income taxes expense Net income 19,900 5,900 $14,000 19,900 3,100 $16,800 Required a. Perform a horizontal analysis, showing the percentage change in each income statement component between Year 3 and Year 4. b. Perform a vertical analysis, showing each income statement component as a percentage of sales for each year. Income statements for Fanning Company for Year 3 and Year 4 follow. FANNING COMPANY Income Statements Year 4. Sales $200,200 Year 3 $180,200 Cost of goods sold. 143,800 121,800 Selling expenses 20,500 18,500 Administrative expenses 12,500 14,500 Interest expense 3,500 5,500 Total expenses $180,300 $160,300 Income before taxes Income taxes expense Net income 19,900 5,900 $14,000 19,900 3,100 $16,800 Required a. Perform a horizontal analysis, showing the percentage change in each income statement component between Year 3 and Year 4. b. Perform a vertical analysis, showing each income statement component as a percentage of sales for each year.