Income statements for Burch Company for Year 3 and Year 4 follow: BURCH COMPANY Income Statements Year 4 Sales $240,000 Cost of goods sold 180,000 Selling expenses 26,000 Administrative expenses 12,000 Interest expense 7,500 Total expenses $225,500 Income before taxes 14,500 Income taxes expense 1,200 Net income $ 13,300 Year 3 $ 200,000 124,000 20,000 18,000 8,000 $170,000 30,000 3,000 $ 27,000 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 answers to 1 decimal place. (i.e., 0.234 should be entered as 23.4).) BURCH 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 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 answers to 1 decimal place. (i.e., 0.234 should be entered as 23.4).) BURCH 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