Question 1 Mudoh Sangat Corporation is preparing pro forma financial statements for 2012. The firm utilized the percent of sales method to estimate cost for the next year. Sales in 2011 were RM 2 million and are expected to increse to RM 2.4 million in 2012. The company has 40% tax rate. Given the 2011 income statement below. prepare the pro forma income statement for year 2012. Mudoh Sangat Corporation Income Statement for the year ended 31 December 2011 RM Sales 2.000.000 Less: Cost of goods sold 1.200.000 Gross profit 800,000 Less: Selling expenses 200,000 General expenses 60.000 Depreciation 40,000 Operating profit 500.000 Less: Interest expenses 80.000 Earnings Before Taxes 420.000 Less: Taxes (40%) 168,000 Net Income after taxes 252.000 Less: Dividends 100.000 Addition to retained earnings 152.000