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:

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

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.

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