Pro forma income statement The marketing department of Metroline Manufacturing estimates that its sales in 2020 will be $1.59 million. Interest expense is expected to remain unchanged at $31,000, and the firm plans to pay $66,000 in cash dividends during 2020. Metroline Manufacturing's income statement for the year ended December 31, 2019, is given 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 Next Pro forma income statement The marketing department of Metroline Manufacturing estimates that its sales in 2020 will be $1.59 million. Interest expense is expected to remain unchanged at $31,000, and the firm plans to pay 566,000 in cash dividends during 2020. Metroline Manufacturing's income statement for the year ended December 31, 2019, is given along with a breakdown of the firm's cost of goods sold and operating expenses into their fixed and variable components. . Less: Interest expense Net profits before taxes $ Less: Taxes Net profits after taxes Less: Cash dividends $ To retained earnings b. Use fixed and variable cost data to develop 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 (based on fixed and variable cost data) Sales Less: Cost of goods sold Next X Pro forma income statement The marketing department of Metroline Manufaturiscostis $66,000 in cash dividends during 2020. Metroline Manufacturing's income state fixed and variable components. Data Table a. Use the percent-of-sales method to prepare a pro forma income statement fl b. Use fixed and variable cost data to develop a pro forma income statement fa c. Compare and contrast the statements developed in parts a. and b. Which st (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.) Sales Metroline Manufacturing Metroline Manufacturing Less: Cost of goods sold Income Statement Breakdown of Costs and Expenses for the Year Ended December 31, 2019 into Fixed and Variable Components Fixed cost Sales revenue $1,392,000 for the Year Ended December 31, 2019 Variable cost Less: Cost of goods sold 904,000 Cost of goods sold Gross profits $488,000 Fixed cost Gross profits $ $204,000 118,000 Less: Operating expenses Variable cost 700,000 Less: Operating expenses Operating profits $370,000 Total cost $904,000 Fixed expense Less: Interest expense 31,000 Operating expenses Variable expense Net profits before taxes $339,000 Fixed expenses $34,000 Less: Taxes (rate = 40%) 135,600 Variable expenses 84,000 Operating profits Net profits after taxes $203,400 Total expenses $118.000 Less: Interest expense Less: Cash dividends 60,000 To retained earnings $143,400 Net profits before taxes $ Less: Taxes Print Done c. Compare and contrast the statements developed in parts a. and b. Which statement probably provides the better estimate of 2020 income? Explain why. (Select from the drop-down menus.) The pro forma income statement developed using the fixed and variable cost data projects a net profit after taxes due to projects a more estimate of net profit after taxes, the pro forma income statement that classifies fixed and variable cost is cost of goods sold and operating expenses. Although the percent-of-sales method accurate