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 Quarter Quarter Quarter Quarter Total Sales revenue $184, 000 $214, 000 $224, 000 $274, 000 $896 , 000 Cost of goods sold 128, 800 149, 800 156 , 800 191, 800 627, 200 Gross profit 55, 200 64, 200 67, 200 82, 200 268, 800 Selling & administrative expenses 18 , 400 21, 400 22, 400 27 , 400 89 , 600 Net income $ 36 , 800 $ 42 , 800 $ 44, 800 $ 54, 800 $179, 200 Historically, cost of goods sold is about 70 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 56 JUN 20 tv 4 XHistorically, cost of goods sold is about 70 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 Ms. Banks' estimate. First Quarter Second Third Quarter Fourth Quarter Quarter Total Sales revenue $ O Cost of goods sold 0 Gross profit 0 0 Selling & administrative expenses Net income $ 0 $ 0 $ 0 $ 0 $ 0 56 JUN 20 atv 4