Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows:

	Current Year	Previous Year
Sales	$ 4,000,000	$3,600,000
Cost of goods sold	2,280,000	1,872,000
Selling expenses	600,000	648,000
Administrative expenses	520,000	360,000
Income tax expense	240,000	216,000

A.

Prepare an income statement in comparative form, stating each item for both years as a percent of sales. Enter all amounts as positive numbers.

B.

Comment on the significant changes disclosed by the comparative income statement.

Prepare an income statement in comparative form, stating each item for both years as a percent of sales. Enter all amounts as positive numbers.

Innovation Quarter Inc.

Comparative Income Statement

For the Years Ended December 31

1		Current year	Current year	Previous year	Previous year
2		Amount	Percent	Amount	Percent
3	Sales	$4,000,000.00		$3,600,000.00
4	Cost of goods sold	2,280,000.00		1,872,000.00
5	Gross profit	$1,720,000.00		$1,728,000.00
6	Selling expenses	600,000.00		648,000.00
7	Administrative expenses	520,000.00		360,000.00
8	Total operating expenses	$1,120,000.00		$1,008,000.00
9	Income from operations	600,000.00		720,000.00
10	Income tax expense	240,000.00		216,000.00
11	Net income	$360,000.00		$504,000.00