Problem: Module 4 Textbook Problem 1 Learning Objective: 4-1 Differentiate between horizontal and vertical analysis Income statements for Walton Company for Year 3 and Year 4 follow. WALTON COMPANY Income Statements Year 4 Year 3 Sales $201,400 $181,400 Cost of goods sold 142,600 120,660 Selling expenses 21,000 19,000 Administrative expenses 12,900 14,900 Interest expense 3,400 5,400 Total expenses $179,900 $159,900 Incone before taxes 21,500 21.500 Income taxes expense 5,500 3,400 Net income $ 16,000 $ 18,100 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, Complete this question by entering your answers in the tabs below. Required A Required B Perform a horizontal analysis, showing the percentage change in each income statement component between Year 3 and Year 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 Complete this question by entering your answers in the tabs below. Required A Required B Perform a horizontal analysis, showing the percentage change in each Income statement component between Year 3 and Year 4. (Negative answers should be indicated by a minus sign. Round your percentage answers to 1 decimal place. (1.6.0.234 should be entered as 23.4).) WALTON COMPANY Horizontal Analysis of Income Statements Percentage Chango over Year 3 Sales % Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes Income taxes expense % Net income (los) Required A Required B Perform a vertical analysis, showing each income statement component as a perce may not add exactly due to rounding. Round your percentage answers to 1 decima 23.4).) WALTON COMPANY Vertical Analysis of Income Statements Percentage of Percentage of Sales Year 4 Sales Year 3 Sales % % Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes Income taxes expense Net income % %