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glment/takeAssignmentMain.do?invoker -assignments&takeAssignmentsessionlocator; assignment-take&inpr; l eBook Show Me How ] Calculator Vertical Analysis of Income Statement Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Current Year $4,000,000 2,280,000 600,000 520,000 240,000 Previous Year Sales Cost of goods sold Selling expenses Administrative expenses Income tax expense $3,600,000 1,872,000 648,000 360,000 216,000 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 Stetement For the Years Ended December 31 Current year Amount Current year Percent $4,000,000 2,280,000 Previous year Amount Previous year Percent Sales $3,600,000 1,872,000 Cost of goods sold Gross profit 4:09 PM 1/72017

Explanation / Answer

Particulars Current year amount Current year percent Previous year amount Previous year percent A B= A/4,000,000 *100 C D= C/3600000 *100 Sales 4000000 100.0% 3600000 100.0% Cost of goods sold 2280000 57.0% 1872000 52.0% Gross profit 1720000 43.0% 1728000 48.0% Selling expenses 600000 15.0% 648000 18.0% Administrative expenses 520000 13.0% 360000 10.0% Total operating expenses 1120000 28.0% 1008000 28.0% Income from operations 600000 15.0% 720000 20.0% Income tax expense 240000 6.0% 216000 6.0% Net income 360000 9.0% 504000 14.0%

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