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 Second Quarter Third Quarter Fourth Quarter Total

Sales revenue $ $181,000$ $ $211,000$ $ $221,000$ $ $271,000$ $ $884,000$

Cost of goods sold $(90,500)(105,500)(110,500)(135,500)(442,000)$

Gross profit $90,500105,500110,500135,500442,000$

Selling & administrative expenses $(18,100)(21,100)(22,100)(27,100)(88,400)$

Net income $ $72,400$ $ $84,400$ $ $88,400$ $ $108,400$ $ $353,600$

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

Prepare a pro forma income statement including quarterly budgets for the coming year using Mr$.$ Arvada$$s estimate.

Prepare a pro forma income statement including quarterly budgets for the coming year using Ms$.$ Banks$$ estimate.