Jacob Long, the controller of Arvada Corporation, is trying to prepare a sales budget for the coming year. The income statements for the last four quarters follow:

	First Quarter				Second Quarter				Third Quarter				Fourth Quarter				Total
Sales revenue	$	185,000			$	215,000			$	225,000			$	275,000			$	900,000
Cost of goods sold		111,000				129,000				135,000				165,000				540,000
Gross profit		74,000				86,000				90,000				110,000				360,000
Selling & administrative expenses		18,500				21,500				22,500				27,500				90,000
Net income	$	55,500			$	64,500			$	67,500			$	82,500			$	270,000

Historically, cost of goods sold is about 60 percent of sales revenue. Selling and administrative expenses are about 10 percent of sales revenue.

Fred Arvada, the chief executive officer, told Mr. Long that he expected sales next year to be 15 percent for each respective quarter above last years level. However, Rita Banks, the vice president of sales, told Mr. Long that she believed sales growth would be only 10 percent.

Required

Prepare a pro forma income statement including quarterly budgets for the coming year using Mr. Arvadas estimate.

Prepare a pro forma income statement including quarterly budgets for the coming year using Ms. Banks estimate.