Pro forma income statement. The marketing department of Metroline Manufacturing estimates that its sales next year will be $ $1\mathrm{.}52$ million. Interest expense is expected to remain unchanged at $ $37000$ and the firm plans to pay $ $74000$ in cash dividends. Metroline$$ Manufacturing's income statement for the previous year is given data, along with a breakdown of the$$ 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 next year.

b$.$ Use fixed and variable cost data to develop a pro forma income statement for next year.

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

$