answer a, b, & c.

Following are the 2019 income statements for Katy Com and Mike Com, competitors in the computer industry. Use these financial st Katy Com Income Statements Sept. 24 2019 $215,639 131,376 84,263 Sept. 26, 2018 $233,715 140,089 93,626 Sept. 27, 2017 $182,795 112,258 70,537 (in millions) Net sales Cost of sales Gross margin Operating expenses Research and development Selling, general and administrative Total operating expenses Operating income Other income (expense), net Income before provision for income taxes Provision for income taxes Net income 10.045 14,194 24,239 60.024 1348 8,067 14,329 22 396 71,230 1,285 6,041 11 993 18.034 52,503 980 61,372 15,685 $ 45,687 72,515 19.121 $53,394 53,483 13,973 $39.510 Mike Com Income Statements June 30, 2019 June 30, 2018 June 30, 2017 $61,502 23 818 85 320 $75,956 17624 93,580 $72.948 13.885 86,833 (in millions) Revenue Product Service and other Total revenue Cost of revenue Product Service and other Total cost of revenue Gross margin Research and development Sales and marketing General and administrative Impairment integration, and restructuring Operating income Other income (expense), net Income before income taxes Provision for income taxes 17,880 14.900 32,780 52,540 11,988 14 697 4,563 1.110 20.182 (431 19.751 2.953 21.410 11,628 33038 60,542 12.046 15.713 4.611 10.011 18.161 346 18,507 6,314 16 681 10.397 27.078 59.755 11 381 15,811 4,677 127 27 759 61 27 820 5746 Provision for Income des Net income $16.798 $12, 193 $22,074 Required a. How do the two companies account for R&D expenditures? b. Katy's and Mike's R&D expense includes many different types of costs List three specific costs included in R&D expense on the income statement Compare R&D expenses of the two companies What trend do you notice in the R&D expenses of each company over time? (Hint determine the common size R&D amounts. Consider both direct R&D expenses as well as acquired R&D) TT T Arial3 (12pt) TE