Pro forma income statement The marketing department of Metroline Manufacturing of the firm's cost of goods sold and operating expenses into their fored and variable com a. Use the percent-of-sales method to prepare a pro forma income statement for next ye b. Use foved and variable cost data to develop a pro forma income statement for next ye c. Compare and contrast the statements developed in parts a. and b. Which statement a. Use the percent-of-sales method to prepare a pro forma income statement for the yea Complete the proforma income statement for the year ended December 31, 2020 below (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.) % 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 S Less: Operating expenses Operating profits S Less: Interest expense Net profits before taxes $ Less: Taxes Net profits after taxes S Less: Cash dividends To retained earnings s 7 96 Metroline Manufacturing Metroline Manufacturing Income Statement Breakdown of Costs and Expenses for the Year Just Ended into Fixed and Variable Components Sales revenue $1,391,000 for the Year Just Ended Less: Cost of goods sold 916,000 Cost of goods sold b. Use foxed and variable cost data to develop a pro forma income statement for the year ended December 31, 2020. Gross profits $475,000 Fixed cost $214,000 Less: Operating expenses Variable cost 119.000 Complete the pro forma income statement for the year ended December 31, 2020 below. (Round the percentage of sales to four 702,000 Operating profits $356,000 Total cost S916,000 Pro Forma Income Statement Less: Interest expense 34.000 Operating expenses Metroline Manufacturing, Inc. Net profits before taxes $322.000 Fixed expenses S34,000 for the Year Ended December 31, 2020 Less: Taxes (rate = 40%) 128.800 Variable expenses 85.000 (based on fixed and variable cost data) ) Net profits after taxes $ 193.200 Total expenses $119.000 Sales $ Less: Cash dividends 62,000 Less: Cost of goods sold To retained earnings $131,200 Fixed cost Variable cost 96 Gross profits $ Less: Operating expenses Fixed expense Variable expense 96 Operating profits S Less: Interest expense Net profits before taxes s Less: Taxes Net profits after taxes $ Less: Cash dividends To retained earnings 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 cost of goods sold and operating expenses. Although the percent-of-sales method projects a more estimate of net profit after taxes, the pro forma income statement that classifies foxed and variable cost is accurate, S