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	$	184,000			$	214,000			$	224,000			$	274,000			$	896,000
Cost of goods sold		110,400				128,400				134,400				164,400				537,600
Gross profit		73,600				85,600				89,600				109,600				358,400
Selling & administrative expenses		18,400				21,400				22,400				27,400				89,600
Net income	$	55,200			$	64,200			$	67,200			$	82,200			$	268,800

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 15 percent for each respective quarter above last years level. However, Rita Banks, the vice president of sales, told Mr. Long that she believed sales growth would be only 10 percent.

Required

1. Prepare a pro forma income statement including quarterly budgets for the coming year using Mr. Arvadas estimate.

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

Check m 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: 2.5 points Sales revenue Cost of goods sold Gross profit Selling & administrative expenses Net income First Quarter $184,000 110,400 73,600 18,400 $ 55,200 Second Quarter $ 214,000 128,400 85,600 21,400 $ 64,200 Third Quarter $224,000 134,400 89,600 22,400 $ 67,200 Fourth Quarter $274,000 164,400 109,600 27,400 $ 82,200 Total $896,000 537,600 358,400 89,600 $268,800 eBook Hint Print References 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 15 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 10 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's estimate. 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's 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. 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 . 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's 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'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