Income statements for Vernon Company for Year 3 and Year 4 follow: VERNON COMPANY Income Statements Year 4 Year 3 Sales $201,000 $181,000 Cost of goods sold 142,000 120,000 Selling expenses 21,400 19,400 Administrative expenses 12,900 14,900 Interest expense 3,700 5,700 Total expenses $180,000 $160,000 Income before taxes 21,008 21,000 Income taxes expense 6,600 3,400 Net income $ 14,400 $ 17,600 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. (l.e., 0.234 should be entered as 23.4).) VERNON COMPANY Horizontal Analysis of Income Statements Percentago 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) % es Required 3 > Income statements for Vernon Company for Year 3 and Year 4 follow: VERNON COMPANY Income Statements Year 4 Sales $201,000 Cost of goods sold 142,000 Selling expenses 21,400 Administrative expenses 12,900 Interest expense 3,700 Total expenses $180,800 Income before taxes 21,000 Income taxes expense 6,600 Net income $ 14,400 Year 3 $181,000 120,000 19,400 14,900 5,700 $160,000 21,000 3,400 $ 17,600 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. (.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 %