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Income statements for Fanning Company for Year 3 and Year 4 follow. FANNING COMPANY Income Statements Year 4 Year 3 Sales $200,300 $180,300 Cost of
- Income statements for Fanning Company for Year 3 and Year 4 follow. FANNING COMPANY Income Statements Year 4 Year 3 Sales $200,300 $180,300 Cost of goods sold 142,600 120,600 Selling expenses 21,500 19,500 Administrative expenses 12,200 14,200 Interest expense 4,000 6,000 Total expenses $180,300 $160,300 Income before taxes 20,000 20,000 Income taxes expense 6,900 3,600 Net income $13,100 $16,400
a. Required 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.
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