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: Sales revenue First Quarter $177,000 Second Third Fourth Quarter Quarter Quarter Total $207,000 $217,000 $267,000 $868,000 Cost of goods sold 88,500 103,500 108,500 133,500 434,000 Gross profit 88,500 Selling & administrative expenses Net income 17,700 103,500 20,700 108,500 133,500 434,000 21,700 26,700 86,800 $ 70,800 $ 82,800 $ 86,800 $106,800 $347,200 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 15 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 10 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 First Quarter Second Quarter Third Quarter < Required A Required B > Fourth Quarter Total