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 $173,000 Second Third Fourth Quarter Quarter Quarter $203,000 $213,000 $263,000 Total $852,000 Cost of goods sold Gross profit Selling & administrative expenses Net income 103,800 69,200 17,300 121,800 127,800 157,800 511,200 $ 51,900 81,200 20,300 $ 60,900 85,200 105,200 340,800 21,300 26,300 85,200 $ 63,900 $ 78,900 $255,600 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 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 First Quarter Second Quarter Third Quarter < Required A Required B > Fourth Quarter Total