Question 09 Pro forma income statement Orion Inc., expects sales during 2018 to rise from the 2017 level of $3.5 million to $6 million. Because of a scheduled large loan payment, the interest expense in 2018 is expected to drop to $350,000. The firm plans to increase its cash dividend payments during 2018 to $400,000. The company's year-end 2017 income statement follows. Orion, Inc. Income Statement for the Year Ended December 31, 2017 Sales revenue Less: Cost of goods sold Gross profits Less: Operating expenses Operating profits Less: Interest expense Net profits before taxes Less: Taxes rate = 40% Net profits after taxes Less: Cash dividends To retained earnings. 3500000 1925000 1575000 420000 1155000 400000 755000 302000 453000 250000 203000 Use the percent-of-sales method to prepare a 2018 pro forma income statement for Orion, Inc