Score: 0 of 20 pts 2 of 4 (1 complete) HW Score: 0%, 0 of 100 pts P4-16 (similar to) Question Help y O Pro forma income statement The marketing department of Metroline Manufacturing estimates that its sales next year will be $1.88 million. Interest expense is expected to remain unchanged at $35.000, and the firm plans to pay $68,000 in cash dividends. Metroline Manufacturing's income statement for the previous year is given along with a breakdown of the firm's cost of goods sold and operating expenses into their fixed and variable components. a. Use the percent-of-sales method to prepare a pro forma income statement for next year. b. Use fixed and variable cost data to develop a pro forma income statement for next year. c. Compare and contrast the statements developed in parts a and b. Which statement probably provides the better estimate of income? Explain why. a. Use the percent-of-sales method to prepare a pro forma income statement for the year ended December 31, 2020. Complete the pro forma income statement for the year ended December 31, 2020 below: (Round the pe - X i Data Table Pro Forma Income Statement Metroline Manufacturing, Inc for the Year Ended December 31, 2020 (For Income Staement, click on the icon here in order to copy the contents of the data table below into a spreadsheet.) (percent-of-sales method) (For Breakdown of Costs and Expenses, click on the icon here in order to copy the contents of the data table below into a Sales $ spreadsheet.) Less: Cost of goods sold % Metroline Manufacturing Metroline Manufacturing Gross profits $ Income Statement Breakdown of Costs and Expenses for the Year Just Ended into Fixed and Variable Components Less: Operating expenses % Sales revenue $1,401,000 for the Year Just Ended Operating profits $ Less: Cost of goods sold 909,000 Cost of goods sold Gross profits $492.000 Fixed cost $218,000 Less: Interest expense Less: Operating expenses 113.000 Variable cost 891,000 Operating profits $379.000 Total cost $909,000 Net profits before taxes $ Less: Interest expense 35,000 Operating expenses Net profits before taxes $344.000 Less: Taxes Fixed expenses $35,000 Less: Taxes (rate = 40%) 137,600 Variable expenses 78,000 Net profits after taxes S Net profits after taxes $206,400 Total expenses $113,000 Less: Cash dividends Less: Cash dividends 60,000 To retained earnings $146,400 To retained earnings S Print Done