Vertical analysis of income statement OBJ. 1 Revenue and expense data for Gresham Inc. for two recent years are as follows:

Current Year Previous Year Sales $2,500,000 $2,350,000 Cost of goods sold 1,500,000 1,292,500 Selling expenses 300,000 376,000 Administrative expenses 375,000 305,500 Income tax expense 150,000 141,000

a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. Round to one decimal place.

b. Comment on the significant changes disclosed by the comparative income statement.