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 $616,000 $524,000 Cost of merchandise sold 332,640 251,520 Selling expenses 110,880 110,040 Administrative expenses 123,200 18,480 Income tax expense 99,560 26,200 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 Sales Cost of merchandise sold For the Years Ended December 31 Current year Amount Current year Percent $616,000 % 332,640 % % Previous year Amount Previous year Percent $524,000 % 251,520 % % Selling expenses 110,880 % 110,040 % Administrative expenses 123,200 % 99,560 % % % Income tax expense % 18,480 % % % 26,200 % % b. The vertical analysis indicates that the cost of merchandise sold as a percent of sales and administrative expenses by 6 percentage points, while selling expenses by 3 percentage points, by 1 percentage points. Thus, net income as a percent of sales by 2 percentage points.