Income statements for Vernon Company for Year 3 and Year 4 follow: VERNON COMPANY Income Statements Year 4 Sales $200,200 Cost of goods sold 142, 300 Selling expenses 21,000 Administrative expenses 12,300 Interest expense 3,400 Total expenses $ 179,000 Income before taxes 21,200 Income taxes expense 5, 100 Net income $ 16,100 Year 3 $180,200 120,300 19,000 14,300 5,400 $159,000 21,200 3,700 $ 17,500 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. Complete this question by entering your answers in the tabs below. 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).) VERNON 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. 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. Complete this question by entering your answers in the tabs below. 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).) VERNON 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 % %