Income Statement ABC Company For the Year Ended December 31, 2015 Sales $2,800,000 Less Cost of goods sold 1820,000 Gross profits $ 980,000 Less Operating expenses 240.000 Operating Profits $ 740.000 Less Interest expense 20000 Net profits before taxes $ 670.000 Less Taxes (40%) 268.000 Net profits after taxes $ 402,000 Lesse Cash Dividends 132.000 Tot Retained earnings $ 270,000 ABC Company estimates its sales in 2016 will be $3 million. Interest expense is expected to remain unchanged at $70,000, and the firm plans to pay cash dividends of $140,000 during 2016. Use the percent-of-sales method to prepare a pro forma income statement for the year ended December 31, 2016, based on the 2015 income statement shown above. 58 C - DELL Income Statement ABC Company For the Year Ended December 31, 2015 Sales $2,800,000 Less Cost of goods sold 1820,000 Gross profits $ 980,000 Less Operating expenses 240.000 Operating Profits $ 740.000 Less Interest expense 20000 Net profits before taxes $ 670.000 Less Taxes (40%) 268.000 Net profits after taxes $ 402,000 Lesse Cash Dividends 132.000 Tot Retained earnings $ 270,000 ABC Company estimates its sales in 2016 will be $3 million. Interest expense is expected to remain unchanged at $70,000, and the firm plans to pay cash dividends of $140,000 during 2016. Use the percent-of-sales method to prepare a pro forma income statement for the year ended December 31, 2016, based on the 2015 income statement shown above. 58 C - DELL