Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Current Year Previous Year Sales $428,000 $377,000 Cost of merchandise sold 231,120 180,960 Selling expenses 77,040 79,170 Administrative expenses 85,600 71,630 Income tax expense 12,840 18,850 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 $428,000 fill in the blank 17bc9e06c04a015_1 % $377,000 fill in the blank 17bc9e06c04a015_2 % Cost of merchandise sold 231,120 fill in the blank 17bc9e06c04a015_3 % 180,960 fill in the blank 17bc9e06c04a015_4 % $ Gross profit Gross profit % $ Gross profit Gross profit % Selling expenses 77,040 fill in the blank 17bc9e06c04a015_10 % 79,170 fill in the blank 17bc9e06c04a015_11 % Administrative expenses 85,600 fill in the blank 17bc9e06c04a015_12 % 71,630 fill in the blank 17bc9e06c04a015_13 % $ Total operating expenses Total operating expenses % $ Total operating expenses Total operating expenses % Income from operations Income from operations % Income from operations Income from operations % Income tax expense 12,840 fill in the blank 17bc9e06c04a015_24 % 18,850 fill in the blank 17bc9e06c04a015_25 % $ Net income Net income % $ Net income Net income % Feedback Area Feedback a. Sales minus cost of merchandise sold equals gross profit. Gross profit minus selling expenses and administrative expenses equals income from operations. Income from operations minus income tax expense equals net income. For each year, divide each income statement element by sales to determine the vertical analysis percentage. Question Content Area b. The vertical analysis indicates that the cost of merchandise sold as a percent of sales by 6 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 2 percentage points. Feedback Area Feedback