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Pro forma income statement The marketing department of Metroline Manufacturing estimates that its sales in 2020 will be $1.55 million. Interest expense is expected to remain unchanged at $38,000, and the firm plans to pay $66,000 in cash dividends during 2020. Metroline Manufacturing's income statement for the year ended December 31, 2019, is given along with a breakdown of the firm's cost of goods sold and operating expenses into their fixed and variable components , a. Use the percent-of-sales method to prepare a pro forma income statement for the year ended December 31, 2020. b. Use fixed and variable cost data to develop a pro forma income statement for the year ended December 31, 2020. c. Compare and contrast the statements developed in parts a. and b. Which statement probably provides the better estimate of 2020 income? Explain why. Pro Forma Income Statement Metroline Manufacturing, Inc. for the Year Ended December 31, 2020 (percent-of-sales method) Sales 1,550,000 Less: Cost of goods sold 993,759 Gross profits 556,241 Less: Operating expenses 123,121 Operating profits 433,120 38.000 64.1135 % 7.9433 % Tann. Intnonnt nunnnnn Pro forma income statement The marketing department of Metroline Manufacturing estimates that its sales in 2020 will be $1.55 million. Interest expense is expected to remain unchanged at $38,000, and the firm plans to pay $66,000 in cash dividends during 2020. Metroline Manufacturing's income statement for the year ended December 31, 2019, is given 3, along with a breakdown of the firm's cost of goods sold and operating expenses into their fixed and variable components. a. Use the percent-of-sales method to prepare a pro forma income statement for the year ended December 31, 2020. b. Use fixed and variable cost data to develop a pro forma income statement for the year ended December 31, 2020. c. Compare and contrast the statements developed in parts a. and b. Which statement probably provides the better estimate of 2020 income? Explain why. 123,121 7.9433 % Less: Operating expenses Operating profits Less: Interest expense Net profits before taxes Less: Taxes 433,120 38,000 395,120 158,048 Net profits after taxes Less: Cash dividends 237,072 66,000 171,072 To retained earnings b. Use fixed and variable cost data to develop a pro forma income statement for the year ended December 31, 2020. (Click on the icon located on the top-right corner of the data tables below in order to copy its contents into a spreadsheet.) Metroline Manufacturing Income Statement for the Year Ended December 31, 2019 Sales revenue $1,410,000 Less: Cost of goods sold 904,000 Gross profits $506,000 Less: Operating expenses 112,000 Operating profits $394,000 Less: Interest expense 38,000 Net profits before taxes $356,000 Less: Taxes (rate = 40%) 142,400 Net profits after taxes $213,600 Less: Cash dividends 63,000 To retained earnings $150,600 Metroline Manufacturing Breakdown of Costs and Expenses into Fixed and Variable Components for the Year Ended December 31, 2019 Cost of goods sold Fixed cost $202,000 Variable cost 702,000 Total cost $904,000 Operating expenses Fixed expenses $35,000 Variable expenses 77,000 Total expenses $112,000 Pro forma income statement The marketing department of Metroline Manufacturing estimates that its sales in 2020 will be $1.55 million. Interest expense is expected to remain unchanged at $38,000, and the firm plans to pay $66,000 in cash dividends during 2020. Metroline Manufacturing's income statement for the year ended December 31, 2019, is given along with a breakdown of the firm's cost of goods sold and operating expenses into their fixed and variable components. , a. Use the percent-of-sales method to prepare a pro forma income statement for the year ended December 31, 2020. b. Use fixed and variable cost data to develop a pro forma income statement for the year ended December 31, 2020. c. Compare and contrast the statements developed in parts a. and b. Which statement probably provides the better estimate of 2020 income? Explain why. Pro Forma Income Statement Metroline Manufacturing, Inc. for the Year Ended December 31, 2020 (based on fixed and variable cost data) $ 1,550,000 Sales Less: Cost of goods sold Fixed cost 202,000 776099 50.0709 % Variable cost Gross profits 571901 dis expected to per le given Pro forma income statement The marketing department of Metroline Manufacturing estimates that its sales in 2020 will be $1.55 million. Interest expense is expected to remain unchanged at $38,000, and the firm plans to pay $66,000 in cash dividends during 2020. Metroline Manufacturing's income statement for the year ended December 31, 2019, is given along with a breakdown of the firm's cost of goods sold and operating expenses into their fixed and variable components. , a. Use the percent-of-sales method to prepare a pro forma income statement for the year ended December 31, 2020. b. Use fixed and variable cost data to develop a pro forma income statement for the year ended December 31, 2020. c. Compare and contrast the statements developed in parts a. and b. Which statement probably provides the better estimate of 2020 income? Explain why. Fixed expense 35,000 85740 5.5316 % 451161 Variable expense Operating profits Less: Interest expense Net profits before taxes 38,000 413161 Less: Taxes 165264 Net profits after taxes Less: Cash dividends 247897 66,000 181897 To retained earnings