Data table (For Income Staement, click on the icon here in order to copy the contents of the data table below into a spreadsheet.) (For Breakdown of Costs and Expenses, click on the icon here spreadsheet.) Metroline Manufacturing Income Statement for the Year Just Ended in order to copy the contents of the data table below into a Metroline Manufacturing Breakdown of Costs and Expenses into Fixed and Variable Components for the Year Just Ended Sales revenue Less: Cost of goods sold Gross profits $1,394,000 916,000 Cost of goods sold $478,000 Fixed cost Less: Operating expenses 121,000 Variable cost Operating profits $357,000 Total cost Less: Interest expense 32,000 Operating expenses Net profits before taxes $325,000 Fixed expenses Less Taxes (rate 40%) 130,000 Variable expenses Net profits after taxes $195,000 Total expenses Less: Cash dividends 65.000 To retained earnings $130,000 $211,000 705,000 $916,000 $38,000 83,000 $121,000 Pro forma income statement The marketing department of Metroline Manufacturing estimates that its sales next year will be $1.65 million. Interest expense is expected to remain unchanged at $32,000, and the firm plans to pay $71,000 in cash dividends. Metroline Manufacturing's income statement for the previous year 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 next year. b. Use fixed and variable cost data to develop a pro forma income statement for next year. c. Compare and contrast the statements developed in parts a. and b. Which statement probably provides the better estimate of income? Explain why. Pro Forma Income Statement Metroline Manufacturing, Inc. for the Year Ended December 31, 2020 (percent-of-sales method) Sales $ Less: Cost of goods sold % Gross profits $ Less: Operating expenses % Operating profits $ Less: Interest expense Net profits before taxes $ Less: Taxes Net profits after taxes $ Net profits before taxes Less: Taxes Net profits after taxes Less: Cash dividends To retained earnings b. Use fixed and variable cost data to develop a pro forma income statement for the year ended December 31, 2020. Complete the pro forma income statement for the year ended December 31, 2020 below: (Round the percentage of sales to four decimal places and the pro forma income statement amounts to the nearest dollar.) Pro Forma Income Statement Metroline Manufacturing, Inc. for the Year Ended December 31, 2020 (based on fixed and variable cost data) Sales Metroline Manufacturing, Inc. for the Year Ended December 31, 2020 (based on fixed and variable cost data) Less: Cost of goods sold Fixed cost Variable cost Gross profits Less: Operating expenses Fixed expense Variable expense Operating profits Less: Interest expense $ % $ % $ Pro forma income statement The marketing department of Metroline Manufacturing estimates that its sales next year will be Operating profits Less: Interest expense Net profits before taxes Less: Taxes Net profits after taxes Less: Cash dividends To retained earnings c. Compare and contrast the statements developed in parts a. and b. Which statement probably provides the better estimate of 2020 income? Explain why. (Select from the drop-down menus.) The pro forma income statement developed using the fixed and variable cost data projects a net profit after taxes due to: cost of goods sold and operating expenses. Although the percent-of-sales method projects a more estimate of net profit after taxes, the pro forma income statement that classifies fixed and variable cost is Yaccurate.