Metroline Manufacturing's income statement for the year ended December $31,2019,$ is given $W,$ along with a breakdown of the firm's cost of goods sold and operating expenses into their fixed and variable components.

a$.$ Use the percent$-$of$-$sales method to prepare a pro forma income statement for the year ended December $31,2020$

b$.$ Use fixed and variable cost data to develop a pro forma income statement for the year ended December $31,2020.$

c$.$ Compare and contrast the statements developed in parts a$.$ and b$.$ Which statement probably provides the better estimate of $2020$ income? Explain why.

a$.$ Use the percent$-$of$-$sales method to prepare a pro forma income statement for the year ended December $31,2020.$

Complete the pro forma income statement for the year ended December $31,2020$ below: $($Round the percentage of sales to four decimal places and the pro forma income statement amounts to the nearest dollar.$)$

Pro Forma Income Statement

Metroline Manufacturing, Inc.

for the Year Ended December $31,2020$

$($percent$-$of$-$sales method$)$

Sales

Less: Cost of goods sold

Gross profits

Less: Operating expenses

Operating profits

Less: Interest expense

Net profits before taxes

Less: Taxes

Net profits after taxes

Less: Cash dividends

To retained earnings

$

$

Data table

$($For Income Staement, click on the icon here $$ in order to copy the contents of the data table below into a spreadsheet.$)$

$($For Breakdown of Costs and Expenses, click on the icon here $$ in order to copy the contents of the data table below into

a spreadsheet.$)$