Vertical Analysis of Income Statement Revenue and expense date for Innovation Quarter Inc. for two recent years are as follows Current Year Previous Year Sales $300,000 $338.000 Cost of merchandise so 258,400 212.940 Selling expenses 49,400 50,700 Active expenses 43,940 13,520 Income tax expense 53,200 7,600 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 desimal place. Enter at amounts as positive numbers Innovation Quarter In Comparative Income Statement For the Years Ended December 31 Current year Amount Current year Percent $300,000 258,400 Sales Cost of merchandise sold Selling expenses 45,400 Administrative expenses $3,200 Previous year Amount Previous year Percent $330,000 212,940 10.700 43,940 7,600 0.00 b. The vertical analysis indicates that the cost of merchandise sold as a percent of sales by 1 percentage points. Thus, net income as a percent of sales ( 13.520 by 5 percentage points, while selling expenses L by 2 percentage points, and administrative expenses by 2 percentage points.