$(5$ points$)$

Income Statement

Huddleston Manufacturing Company

For the Year Ended December $31,2020$

Huddleston Manufacturing estimates its sales in $2021$ will be $$3\mathrm{.}2$ million. Interest expense is

expected to remain unchanged at $$80,000,$ and the firm plans to pay cash dividends of $$175,000$

during $2021.$ Cost of goods sold includes $$200,000$ in fixed costs, and operating expenses include

$$50,000$ in fixed costs. Use the fixed$/$variable expense method to prepare a pro forma income

statement for the year ended December $31,2021,$ based on the $2020$ income statement shown

above.