Pro forma income statement-Scenario analysis Allen Products LP, wants to do a scenario analysis for the coming year. The pessimistic prediction for sales is $902,000; the most likely amount of sales is $1,126,000; and the optimistic prediction is $1,279,000. 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. c. Restate the pro forma income statements prepared in part a. to incorporate the following assumptions about the 2019 costs: $254,590 of the cost of goods sold is fixed; the rest is variable. $173,668 of the operating expenses is fixed; the rest is variable. All the interest expense is fixed. (Please see: 1 ) d. Compare your findings in part c. 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 pro forma income statements for the coming year. Complete the pro forma income statement for the year ending December 31, 2020 that is shown below (pessimistic scenario): (Round the percentage of sales to one decimal place and the pro forma income statement accounts to the nearest dollar.) (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Allen Products, Inc. Income Statement for the Year Ended December 31, 2019 Sales revenue $936,800 Less: cost of good sold 423,434 Gross profits $513,366 Less: operating expenses 235,137 Operating profits $278,229 Less: interest expense 32,788 Net profit before taxes $245,441 Less: taxes (rate 30%) 73,632 Net profits after taxes $171,809