Pro forma income statement scenario analysis Alle Products, Inc. wants to do a scenario analysis for the coming year. The pessimistic prediction for sales is $85.000, the most amount of sales is $1,129,000, and the optimistic prediction is $1,283,000. Allen's income statement for the most recent year is shown here a. Use the percent of sales method, the income statement for December 31, 2019, and the sales revenue estimates to develop pessimistic, most likely, and optimistic pro forma income statements for the coming yea b. Explain how this method could result in overstatement of profits for the pessimistics and understatement of profits for the most likely and optimistic cases e. Restate the proforma income statements prepared in part a to incorporate the following assumptions about the 2019 costs: $235,610 of the cost of goods sold is found the rest is variable. $194,875 of the operatin expenses is fixed; the rest is variable. All the interest expense is fixed. (Please see ) d. Compare your findings in parte to your findings in parta. Do your observations confirm your explanation in part b? a. Use the percent of sales method the income statement for December 31, 2019, and the sales revenue simtes to develop pessimistic, mostly, and optimistic pro forma com m ents are coming ye Complete the proforma income statement for the year ending December 31, 2020 at is shown below pe e nario Round the percentage of sales to one decimal place and the proforma income star accounts to the nearest dollar) Pro Forma Income Statement Allen Products, Inc. for the Year Ended December 31, 2020 Pessimistic Sales Less: Cost of goods sold S Gross profits Less: Operating expenses Operating profits Enter any number in the edit fields and then continue to the next question. income statement for the most recent year is shown here ::: * Data Table in order to copy the contents of the data table below (Click on the icon here into a spreadsheet.) Allen Products, Inc. Income Statement for the Year Ended December 31, 2019 Sales revenue $937,400 Less: cost of good sold 419,955 Gross profits $517,445 Less: operating expenses 254,973 Operating profits $262,472 Less: interest expense 32,809 Net profit before taxes $229,663 Less: taxes (rate 25%) 57,416 Net profits after taxes $172,247 br sales i i Data Table for fr arta ose optimisti ases. Is sold is (Click on the icon here into a spreadsheet.) in order to copy the contents of the data table below for optimistic ing les to one Allen Products, Inc. Income Statement for the Year Ended December 31, 2019 Sales revenue $937,400 Less: cost of good sold Fixed 235,610 Variable 184,345 Gross profits $517,445 Less: operating expenses Fixed 194,875 Variable 60,098 Operating profits $262,472 Less: interest expense 32,809 Net profit before taxes $229,663 Less: taxes (rate 25%) 57,416 Net profits after taxes $172,247 Print Done