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: Sales revenue Cost of goods sold Gross profit Selling & administrative expenses Net income First Quarter $178,000 89,000 89.000 17,800 $ 71,200 Second Quarter $208,000 104,000 104,000 20,800 $ 83,200 Third Quarter $218,000 109,000 109,000 21,800 $ 87,200 Fourth Quarter $268,000 134,000 134,000 26,800 $107,200 Total $872,000 436,000 436,000 87,200 $348,800 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'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. Fourth Quarter T otal $ Sales revenue Cost of goods sold Gross profit Soling & administrative expenses Net income First Quarter $ 196,800 97.000 97,000 19,580 $ 78.320 Second Quarter $ 228,800 114.400 114 400 22 880 $ 91,520 Third Quarter $ 239,800 110.000 119,900 23,080 $ 95,020 0 664,400 332,200 332.200 66,440 265.760 $ 0 $ 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: Sales revenue Cost of goods sold Gross profit Selling & administrative expenses Net income First Quarter $178,000 89,000 89,000 17.800 $ 71,200 Second Quarter $208,000 104,000 104,000 20.800 $ 83,200 Third Quarter $218,000 109,000 109,000 21,800 $ 87,200 Fourth Quarter $268,000 134,000 134,000 26,800 $107,200 Total $872,000 436.000 436.000 87. 200 $348, 800 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'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 3 186,000 5 218.400 $ 220,000 $ 634,200 Cost of goods sold 93.450 100 200 114.450 317,100 Gross profit 93.450 100 200 114.4501 317,100 Selling administrative expenses 18.600 21,840 22.8901 3.420 Not income 74,700 87,360 91.500S 0S 253.680