Pro forma income statement-Scenario analysis Allen Products, Inc., wants to do a scenario analysis for the coming year. The pessimistic prediction for sales is 5896,000, the most likely amount of sales is 51,125,000 and the optimistic prediction is 51,290,000. 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 year b. Explain how this method could result in overstatement of profits for the pessimistic case and understatement of profits for the most likely and optimistic cases G. Restate the proforma Income statements prepared in part a. to incorporate the following assumptions about the 2019 costs: 5293 265 of the cost of goods sold is fixed; the rest is variable. $185,373 of the operating expenses is fixed the rest is variable. All the interest expense is forced (Please see: E d. Compare your findings in parte. to your findings in part a. 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 estimates to develop pessimistic, most likely, and optimistic proforma income statements for the coming year. Complete the proforma income statement for the year ending Dacamber 31, 2020 that is shown balow (pessimistic scenario): Round the percentage of sales to one decimal place and the proforma income statement 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 $ Gross profits $ % Enter any number in the edit fields and then click Check Answer 7 parts remaining Clear All Check Answer Pro forma income statement-Scenario analysis Allen Products, Inc., wants to do a scenario analysis for the coming year. The pessimistic prediction for sales is 5896,000, the most likely amount of sales is $1,125,000, and the optimistic prediction is 51,290 000. 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 year, b. Explain how this method could result in overstatement of profits for the pessimistic case and understatement of profits for the most likely and optimistic cases G. Restate the proforma Income statements prepared in part a. to incorporate the following assumptions about the 2019 costs: 5293 265 of the cost of goods sold is fixed; the rest is variable. $185,373 of the operating expenses is fixed the rest is variable. All the interest expense is foed. (Please see ) d. Compare your findings in part c. to your findings in part a. Do your observations confirm your explanation in part b? for the Year Ended December 31, 2020 Pessimistic Sales $ Less: Cost of goods sold 5 Gross profits $ Less: Operating expense $ Operating profits $ Less: Interest expense S Net profits before taxes S Taxes (25%) $ Net profits after taxes % % % $ Enter any number in the edit fields and then click Check Answer 7 parts remaining Clear All Check Answer Pro forma income statement-Scenario analysis Allen Products, Inc., wants to do a scenario analysis for the coming year. The pessimistic prediction for sales is 5896,000, the most likely amount of sales is $1.125.000 and the optimistic prediction is $1.290.000. Allen's income statement for the most recent year is shown here a. Use the percent-of-sales Data Table hop pessimistic, most likely, and optimistic pro forma income statements b. Explain how this method ca the most likely and optimistic cases. C. Restate the pro forma incor S: 5293 265 of the cost of goods sold is fixed; the rest is variable $18 (Click on the icon here in order to copy the contents of the data table below Please see into a spreadsheet.) d. Compare your findings in for the Year End Allen Products, Inc. Income Statement for the Year Ended December 31, 2019 Sales revenue $937,400 Sales Less cost of good sold 465,888 Gross profits 5471,512 Less: Cost of goods sold Less operating expenses 238,100 Gross profits Operating profits $233,412 Less: Operating expense Less: Interest expense 31,872 Net profit before taxes 5201,540 Operating profits Less taxes (rate 25%) 50,385 Less: Interest expense Net profits after taxes 5151, 155 Net profits before taxes Taxes (25%) Print Done Net profits after taxes Enter any number in the edit fields and then click Check Answer 7 parts remaining Clear All Check Answer P4-17 (similar to) Question Help Pro forma income statement-Scenario analysis Alien Producten wants to do ano analitic for the cominn var The pessimistic prediction for sales is 5896,000, the most likely amount of he most recent year is shown here Data Table - X a. Use the percent-of-sales method simistic, most likely, and optimiste pro forma income statements for the b. Explain how this method could res C. Restate the pro forma income stat (Click on the icon here in order to copy the contents of the data table below st likely and optimistic cases 3.265 of the cost of goods sold is into a spreadsheet fixed; the rest is variable. $185,373 d. Compare your findings in parte. Allen Products, Inc. Income Statement for for the Year Ended Dog the Year Ended December 31, 2019 Sales revenue $937.400 P Less cost of good sold Sales $ Fixed 293,265 Variable 172.623 Less: Cost of goods sold $ Gross profits $471,512 Gross profits $ Less operating expenses Fixed 185, 373 Less: Operating expense $ Variable 52.727 Operating profits $ Operating profits $233 412 Less: Interest expense $ Less: interest expense 31,872 Net profit before taxes $201.540 Net profits before taxes S Less taxes (rate 25%) 50,385 Taxes (25%) $ Net profits after taxes $151 155 Net profits after taxes $ Print Done Enter any number in the edit fields 7 parts remaining Clear All Check