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

Current Year Previous Year

Sales $$487,000$ $$443,000$

Cost of merchandise sold $282,460225,930$

Selling expenses $82,79088,600$

Administrative expenses $87,66075,310$

Income tax expense $14,61022,150$

Question Content Area

a$.$ Prepare an income statement in comparative form, stating each item for both years as a percent of sales. If required, round percentages to one decimal place. Enter all amounts as positive numbers.

Innovation Quarter Inc.

Comparative Income Statement

For the Years Ended December $31$

Current year Amount Current year Percent Previous year Amount Previous year Percent

Sales $$487,000$ fill in the blank d$0$ff$4$afb$3$f$87$fc$8\_1$

$\%$ $$443,000$ fill in the blank d$0$ff$4$afb$3$f$87$fc$8\_2$

$\%$

Cost of merchandise sold $282,460$ fill in the blank d$0$ff$4$afb$3$f$87$fc$8\_3$

$\%225,930$ fill in the blank d$0$ff$4$afb$3$f$87$fc$8\_4$

$\%$

$$-$ Select $-$

$-$ Select $-$

$\%$ $$-$ Select $-$

$-$ Select $-$

$\%$

Selling expenses $82,790$ fill in the blank d$0$ff$4$afb$3$f$87$fc$8\_10$

$\%88,600$ fill in the blank d$0$ff$4$afb$3$f$87$fc$8\_11$

$\%$

Administrative expenses $87,660$ fill in the blank d$0$ff$4$afb$3$f$87$fc$8\_12$

$\%75,310$ fill in the blank d$0$ff$4$afb$3$f$87$fc$8\_13$

$\%$

$$-$ Select $-$

$-$ Select $-$

$\%$ $$-$ Select $-$

$-$ Select $-$

$\%$

$-$ Select $-$

$-$ Select $-$

$\%-$ Select $-$

$-$ Select $-$

$\%$

Income tax expense $14,610$ fill in the blank d$0$ff$4$afb$3$f$87$fc$8\_24$

$\%22,150$ fill in the blank d$0$ff$4$afb$3$f$87$fc$8\_25$

$\%$

$$-$ Select $-$

$-$ Select $-$

$\%$ $$-$ Select $-$

$-$ Select $-$

$\%$

Question Content Area

b$.$ The vertical analysis indicates that the cost of merchandise sold as a percent of sales

by $7$ percentage points, while selling expenses

by $3$ percentage points, and administrative expenses

by $1$ percentage points. Thus, net income as a percent of sales

by $3$ percentage points.