The marketing department of Metroline Manufacturing estimates that its sales in 2016 will be $ 1.67 million. Interest expense is expected to remain unchanged at $ 34 000, and the firm plans to pay $ 74000 in cash dividends during 2016. Metroline Manufacturing's income statement for the year ended December 31, 2015, 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 the year ended December 31, 2016. b. Use fixed and variable cost data to develop a pro forma income statement for the year ended December 31, 2016.

b. Use fixed and variable cost data to develop a pro forma income statement for the year ended December 31, 2016.

(Click on the icon located on the top-right corner of the data tables below in order to copy its contents into a spreadsheet.) Metroline Manufacturing Income Statement for the Year Ended December 31, 2015 Sales revenue $1,396,000 Less: Cost of goods sold 910,000 Gross profits $486,000 Less: Operating expenses 114,000 Operating profits $372,000 Less: Interest expense 34,000 Net profits before taxes $338,000 Less: Taxes (rate = 40%) 135,200 Net profits after taxes $202,800 Less: Cash dividends 60,000 To retained earnings $142,800 Metroline Manufacturing Breakdown of Costs and Expenses into Fixed and Variable Components for the Year Ended December 31, 2015 Cost of goods sold Fixed cost $204,000 Variable cost 706,000 Total cost $910,000 Operating expenses Fixed expenses $32,000 Variable expenses 82,000 Total expenses $114,000