Income statements for Adams Company for Year 3 and Year 4 follow: ADAMS COMPANY Income Statements Year 4 Sales $200,400 Cost of goods sold 142,600 Selling expenses 21,500 Administrative expenses 12,900 Interest expense 3,800 Total expenses $180,800 Income before taxes 19,600 Income taxes expense 5,700 Net income $ 13,900 Year 3 $180,400 120,600 19,500 14,900 5,800 $160,800 19,600 3,200 $ 16,400 Required a. Perform a horizontal analysis, showing the percentage change in each income statement component between Year 3 and Year 4. b. Perform a vertical analysis, showing each income statement component as a percentage of sales for each year. Required A Required B Perform a horizontal analysis, showing the percentage change in each income statement component between Year 3 and Year 4. (Negative answers should be indicated by a minus sign. Round your percentage answers to 1 decimal place. (i.e., 0.234 should be entered as 23.4).) ADAMS COMPANY Horizontal Analysis of Income Statements Percentage Change over Year 3 Sales % Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes Income taxes expense Net income (loss) % Required A Required B > Required A Required B Perform a vertical analysis, showing each income statement component as a percentage of sales for each year. (Percentages may not add exactly due to rounding. Round your percentage answers to 1 decimal place. (i.e., 0.234 should be entered as 23.4).) ADAMS COMPANY Vertical Analysis of Income Statements Percentage of Percentage of Sales Year 4 Sales Year 3 Sales % % Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes Income taxes expense Net income % %