prepare a profoma income statement using the percent of sales method Sales revenue $$800,000$

Less: Cost of goods sold $600,000$

Gross profits $$200,000$

Less: Operating expenses $100,000$

Net profit before taxes $$100,000$

Less: Taxes $($rate$=40\%)40,000$

Net profit after taxes $$60,000$

Less: Cash dividends $20,000$

To retained earnings $$40,000$