I only want the answers to 3 & 4 because I already have the answers to questions 1 & 2 (requirements 1 and 2 are posted below):

Your sister operates Hercules Parts Company, a mail order boat parts distributorship that is in its third year of operations. The following is the single step income statement for the year ended December 31, 2016 Hercules Parts Company Income Statement Year Ended December 31, 2016 Revenues: $ 600,000 Net sales revenue Expenses: Cost of Goods Sold Sales Salaries Expense Freight Out Expense (shipping charges) Advertising Expense Office Salaries Expense Office Supplies Expense Interest Expense $ $ $ 420,000 38,850 20,000.00 7,000.00 $ 31,200 $ 2,800.00 $ 10,000.00 Total Expenses Net Income $529,850 70.150 Your sister had the following inventory balances: 38,000.00 44,000.00 18,000.00 1/01/16 $ 12/31/16 Projected inventory as of 12/31/17 $ Your sister is considering a proposal to increase net income by offering their sales representatives a salary commission on every unit they sell. This should help increase sales. They also will be able to bargain for a better purchase price for their inventory, control their inventory more efficiently by adopting just-in-time inventory and by shipping all merchandise FOB Shipping Point. Presently, all merchandise is shipped FOB Destination. (Assume that the interest expense will remain the same in 2017) It is estimated that more creative marketing (in 2017) will enable Hercules to have a 20% increase in the Net Sales they had in 2016 by attracting new customers. Assume the new shipping terms (in 2017) will cause Hercules to have 15% decrease in the Net Sales they had in 2016 Due to intense negotiations, Hercules was able to reduce the cost of goods sold to 65% of Net Sales Assume that Sales Salaries Expense, Advertising Expense, Office Salaries Expense and Office Supplies Expense will all increase by 10%. Assume that all sales representatives will now receive a 5% commission on every sales dollar. This will create a new expense that we will call Sales Commission Expense. Required: 1. Prepare a projected multiple step income statement for the year ended December 31, 2017. Submit using the Group Project 2 work paper excel file. Tab parts 1-2. Use the Merchandise Operations vertical analysis video as a guide to prepare the multiple step income statement. 2. Prepare the vertical analysis of the income statement for the two years ended December 31, 2017 and December 31, 2016. Use the Merchandise Operations vertical analysis video as a guide to prepare the Analysis. Submit using the Group Project 2 work paper excel file Tab Parts 1-2 3. From the projections, does it appear that Hercules will do a better job controlling their inventory? Why or Why Not? Include your computation of the inventory turnover for 2017 and 2016 to support the rationale for your answer. Submit using the Group Project 2 work paper excel file Tab Parts 3-4 4. Based on your projected income statement and vertical analysis would you recommend the proposed changes? Why or why not? Submit using Tab Parts 3-4 of the Group Project 2 work paper excel file. Parts 3-4 Requirement 3. 2017 2016 Inventory Turnover: Cost of goods sold Average Inventory Requirement 4. Hercules Parts Company Proposed Multiple Step Income Statement Year Ended December 30, 2017 Revenues: Net Sales revenue 630,000 (409,500) 220,500 Cost of goods sold Gross profit Operating expenses (list below) Sale Salaries expense $ 42,735 Freight out expense Advertising expense Office salaries expense Office supplies expense $ 20,000 7,700 34,320 $ 3,080 Interest expense $ 10,000 Sales commission expense $ 31,500 Total Expenses $ $ (149,335) 149,335 Net income 71,165 Requirement 2 Hercules Parts Company Vertical Analysis for the years ended December 31, 2017 and 2016 2017 ent 2016 Pecent 100% 600,000 -420,000 180,000 38,850 20,000 7,000 Net Sales Revenue 630,000 (409,500) 220,500 42,735 20,000 7,700 31,500 34,320 3,080 10,000 71,165 100% 65% 70% Cost of Goods Sold Gross Profit 35% 30% Sales Salaries Expens Freight Out Expense Advertising Expense Sales Comm. Expens Office Salaries Expen Office Supplies Exper Interest Expense 7.12% 6.48% 3.17% 3.33% 1.17% 1.22% 5% 31,200 2,800 10,000 70,150 5.20% 5.45% 0.49% 0.47% 1.59% 1.67% Net Income 11.30% 11.69%