Problem: Module 4 Textbook Problem 1 Learning Objective: 4-1 Differentiate between horizontal and vertical analysis Income statements for Adams Company for Year 3 and Year 4 follow: ADAMS COMPANY Income Statements Sales Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes Income taxes expense Net income Year 4 $201,900 Year 3 $181,900 142,600 120,600 21,600 19,600 12,600 14,600 3,700 5,700 $180,500 $160,500 21,400 5,900 21,400 3,400 $ 15,500 $ 18,000 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. 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).) ADAMS COMPANY Horizontal Analysis of Income Statements Sales Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes Income taxes expense Net income (loss) Percentage Change over Year 3 % % Required A Required B >