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 goods sold	2,280,000		1,872,000
Selling expenses	600,000		648,000
Administrative expenses	520,000		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. Round to the nearest whole percentage.

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	$4,000,000	%	$3,600,000	%
Cost of goods sold	(2,280,000)	%	(1,872,000)	%
Gross profit	$	%	$	%
Selling expenses	$(600,000)	%	$(648,000)	%
Administrative expenses	(520,000)	%	(360,000)	%
Total operating expenses	$	%	$	%
Operating income	$	%	$	%
Income tax expense	(240,000)	%	(216,000)	%
Net income	$	%	$	%