Vertical Analysis of Income Statement Revenue and expense data for Innovation Quarter Inc. for two recent years...

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Accounting

Vertical Analysis of Income Statement
Revenue and expense data for Innovation Quarter Inc. for tworecent years are as follows:
CurrentYear PreviousYear
Sales $567,000 $493,000
Cost of goods sold 385,560 310,590
Selling expenses 73,710 73,950
Administrative expenses 79,380 64,090
Income tax expense 11,340 19,720
a. Prepare an income statement in comparativeform, stating each item for both years as a percent of sales. Ifrequired, round percentages to one decimal place. Enter all amountsas positive numbers.
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 $567,000 % $493,000 %
Cost of goods sold 385,560 % 310,590 %
$ % $ %
Selling expenses 73,710 % 73,950 %
Administrative expenses 79,380 % 64,090 %
$ % $ %
% %
Income tax expense 11,340 % 19,720 %
$ % $ %
b. The vertical analysis indicates that thecost of goods sold as a percent of sales _ by 5 percentagepoints, while selling expenses _ by 2 percentage points, andadministrative expenses _ by 1 percentage points. Thus, netincome as a percent of sales _ by 2 percentage points.

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Innovation Quarter Inc Comparative Income Statement For the Years Ended December 31 Current year Amount Current year Percent Previous year Amount Previous year Percent See Answer

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	CurrentYear	PreviousYear
Sales	$567,000	$493,000
Cost of goods sold	385,560	310,590
Selling expenses	73,710	73,950
Administrative expenses	79,380	64,090
Income tax expense	11,340	19,720

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	$567,000	%	$493,000	%
Cost of goods sold	385,560	%	310,590	%
	$	%	$	%
Selling expenses	73,710	%	73,950	%
Administrative expenses	79,380	%	64,090	%
	$	%	$	%
		%		%
Income tax expense	11,340	%	19,720	%
	$	%	$	%