Vertical Analysis of Income Statement Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Current Year $516,000 Sales Cost of merchandise sold Previous Year $454,000 227,000 283,800 92,880 90,800 Selling expenses Administrative expenses Income tax expense 98,040 81,720 22,700 15,480 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 Sales Current year Amount Current year Percent $516,000 283,800 % Previous year Amount Previous year Percent $454,000 % 227,000 % Cost of merchandise sold % % % Selling expenses 92,880 % 90,800 % Administrative expenses 98,040 % 81,720 % % % % % % Income tax expense 15,480 % 22,700 % % % b. The vertical analysis indicates that the cost of merchandise sold as a percent of sales selling expenses by 2 percentage points, and administrative expenses Thus, net income as a percent of sales by 2 percentage points. by 5 percentage points, while by 1 percentage points