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 $190,000 133,000 57,000 Second Quarter $220,000 154,000 66,000 Third Quarter $230,000 161,000 69,000 Fourth Quarter $280,000 196,000 84,000 Total $920,000 644,000 276,000 Sales revenue Cost of goods sold Gross profit Selling & administrative expenses Net income 19,000 22,000 23,000 28,000 92,000 $ 38,000 $ 44,000 $ 46,000 $ 56,000 $184,000 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 Required A B Prepare a pro forma income statement including quarterly budgets for the coming year using Mr. Arvada's estimate. First Quarter Second Quarter Third Quarter Fourth Quarter Total Sales revenue Cost of goods sold Gross profit Selling & administrative expenses Net income Required A Required B > Required Required A B Prepare a pro forma income statement including quarterly budgets for the coming year using Ms. Banks' estimate. First Quarter Second Quarter Third Quarter Fourth Quarter Total Sales revenue Cost of goods sold Gross profit Selling & administrative expenses Net income