Vertical Analysis of Income Statement 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 merchandise sold 2,280,000 1,872,000 Selling expenses 600,000 648,000 Administrative expenses Income tax expense 520,000 240,000 360,000 216,000 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 Previous year Amount Previous year Percent Current year Amount Current year Percent Sales $4,000,000 % Cost of merchandise sold 2,280,000 % % Selling expenses 600,000 % Administrative expenses 520,000 % % $3,600,000 % 1,872,000 % % 648,000 % 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. 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 Previous year Amount Previous year Percent Current year Amount Current year Percent Sales $4,000,000 % $3,600,000 % Cost of merchandise sold 2,280,000 % 1,872,000 % % % Selling expenses 600,000 % 648,000 % Administrative expenses $20,000 % 360,000 % % % % % Income tax expense 240,000 % 216,000 96 " b. The vertical analysis indicates that the cost of merchandise sold as a percent of sales ( by 3 percentage points, and administrative expenses by 5 percentage points. by 5 percentage points, while selling expenses by 3 percentage points. Thus, net income as a percent of sales