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 Second Third Fourth Sales revenue Quarter $174,000 Quarter Quarter Quarter Total $204,000 $214,000 $264,000 $856,000 Cost of goods sold 87,000 102,000 107,000 132,000 428,000 Gross profit 87,000 Selling & administrative expenses Net income 17,400 102,000 20,400 107,000 132,000 428,000 $ 69,600 $ 81,600 21,400 $ 85,600 26,400 85,600 $105,600 $342,400 Historically, cost of goods sold is about 50 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 10 percent for each respective quarter above last year's level. However, Rita Banks, the vice president of sales, told Mr. Long that she believed sales growth would be only 5 percent. Required a. Prepare a pro forma income statement including quarterly budgets for the coming year using Mr. Arvada's estimate. b. Prepare a pro forma income statement including quarterly budgets for the coming year using Ms. Banks' estimate. Complete this question by entering your answers in the tabs below. Required A Required B Prepare a pro forma income statement including quarterly budgets for the coming year using Mr. Arvada's estimate. Sales revenue Cost of goods sold Gross profit Selling & administrative expenses Net income Required A Required B First Quarter Second Quarter Third Quarter Required A Required B > Fourth Quarter Total Prepare a pro forma income statement including quarterly budgets for the coming year using Ms. Banks' estimate. Sales revenue Cost of goods sold Gross profit Selling & administrative expenses Net income First Quarter Second Quarter Third Quarter < Required A Required B Fourth Quarter Total