Question one: (5 marks) The Wirl-Wind Company is trying to plan for the next year. Use the fixed and variable method to prepare the company's pro forma income statement. Sales are projected to increase by 20 percent next year. Total of $75,000 in dividends will be paid next year. Income Statement Wirl Wind Company Sales revenue $3,028,500 Less: Cost of goods sold Fixed costs 1,350,000 Variable costs 1,260,600 Gross profits $ 417,900 Less: Operating expenses Fixed expenses 4,500 85,840 Variable expenses Operating profits $327,560 82,150 Less: Interest expense Net profits before taxes $245,410 Less: Taxes (40%) 98,164 Net profits after taxes $147,246 Less: Dividend 50,000 Increased retained earnings $ 97,246