Eventati, Inc., is preparing pro forma financial statements for 2020. Eventati utilized the percent-of-sales method to estimate costs for the next year. Sales in 2019 were $2 million and are expected to increase to $2.4 million in 2020. The firm has a 40 percent tax rate. If $200,000 of the cost of goods sold and $40,000 of selling expense are fixed costs; and the interest expense and dividends are not expected to change, what is the dollar effect on net income and retained earnings? Income Statement Eventati, Inc. For the Year Ended December 31, 2019 Sales $200,000 Less Cost of goods sold 1.200,000 Gross profit SNO Lese Selling expense 200.000 General & administrative expense 0 000 Less Depreciation Operating profit S2000 Les interest Farnings before taxes 20 Net profit after/EACS 5.25 mail:help@ritaj.ps Selling Expense of 2020 Choose... Forecasted sales of 2020 Choose... to Retained earnings Choose... Operating Profit of 2020 Choose... - Net Income " Earnings after-tax" of 2020 Choose... Interest Expense of 2020 Choose... Variable Cost of goods sold of 2020 Choose... Common stock Dividends. Choose