Vertical analysis of income statement Revenue and expense data for Innovation Quarter Inc. for two recent...

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Vertical analysis of income statement Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Sales Cost of goods sold Selling expenses Administrative expenses Current Year Previous Year $4,000,000 2,280,000 $3,600,000 1,872,000 600,000 648,000 520,000 240,000 360,000 216,000 Income tax expense a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. Round your answers to the nearest whole percentage. Innovation Quarter Inc. Comparative Income Statement For the Years Ended December 31 Current year Current year Previous year Previous year Line Item Description Amount Percent Amount Percent Sales $4,000,000 % $3,600,000 % Cost of goods sold (2,280,000) % (1,872,000) % % % Selling expenses $(600,000) % $(648,000) % Administrative expenses (520,000) % (360,000) % % % % % Income tax expense (240,000) % (216,000) % % % b. The vertical analysis indicates that the cost of goods sold as a percent of sales percentage points. by 5 percentage points, while selling expenses by 3 percentage points, and administrative expenses by 3 percentage points. Thus, net income as a percent of sales by 5 Vertical analysis of income statement Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Sales Cost of goods sold Selling expenses Administrative expenses Current Year Previous Year $4,000,000 2,280,000 $3,600,000 1,872,000 600,000 648,000 520,000 240,000 360,000 216,000 Income tax expense a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. Round your answers to the nearest whole percentage. Innovation Quarter Inc. Comparative Income Statement For the Years Ended December 31 Current year Current year Previous year Previous year Line Item Description Amount Percent Amount Percent Sales $4,000,000 % $3,600,000 % Cost of goods sold (2,280,000) % (1,872,000) % % % Selling expenses $(600,000) % $(648,000) % Administrative expenses (520,000) % (360,000) % % % % % Income tax expense (240,000) % (216,000) % % % b. The vertical analysis indicates that the cost of goods sold as a percent of sales percentage points. by 5 percentage points, while selling expenses by 3 percentage points, and administrative expenses by 3 percentage points. Thus, net income as a percent of sales by 5