Suppose you are interested in evaluating Leeds and Creative companies' financial performance during 2020; both companies operate in the technological sector. Given the income statement and the balance sheet of each company, answer the following questions:

Compile the Pro forma Income statement for Leeds and Creative companies for the year 2020 using percent of sales method. (look at the photo)

Creative company Income statement December 31, 2019 and 2020 2019 2020 $800,000 $900,000 520,000 280,000 Sales Cost of goods sold Gross Profit Operating Expense: Selling, general and administrative expenses Utilities expense Advertisement expenses Depreciation expense Sundry expenses Total operating expenses Operating Income Interest expense Income before Income Taxes Income taxes (25%) Net Income 2,000 80,000 23111.11 22222.22 500 22222.22 148,056 131,944 25,000 106,944 26,736 $80.208 35,000