Help with the second half:

Pro form income statement. The marketing department of Metroline Manufacturing estimates that its sales next year will be $1.5 million. Interest expense is expected to remain unchanged at $35,000, and the firm plans to pay $70,000 in cash dividends. Metroline Manufacturing's income statement for the previous year and a breakdown of the firm's cost of goods sold and operating expenses into their fixed and variable components are given below. 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. Solution a. Use the percent-of-sales method to prepare a pro forma income statement for next year. a. Use the percent-of-sales method to prepare a pro forma income statement for next year. Percentage of sales calculations: b. Use fixed and variable cost data to develop a pro forma income statement for next year. Compare and contrast the statements developed in parts a and b. Which statement probably provides the better estimate of income? Explain why