Current Year Previous Year 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 360,000 Income tax expense 520,000 240,000 216,000 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. Line Item Description Innovation Quarter Inc. Comparative Income Statement For the Years Ended December 31 Current year Current year Previous year Previous year Percent Amount Percent Amount Sales $4,000,000 % $3,600,000 Cost of goods sold (2,280,000) % (1,872,000) 1 Selling expenses $(600,000) $(648,000) Administrative expenses (520,000) (360,000) Income tax expense (240,000) %6 (216,000) P% b. The vertical analysis indicates that the cost of goods sold as a percent of sales) by 3 percentage points, and administrative expenses) by 5 percentage points. by 5 percentage points, while selling expenses by 3 percentage points. Thus, net income as a percent of sales Previous Next