Using the below information:

Allen Products, Inc. Income Statement for the Year Ended December 31, 2019 Sales revenue $937,800 Less: cost of good sold 378,871 Gross profits $558,929 Less: operating expenses 223,196 Operating profits $335,733 Less: interest expense 32,823 Net profit before taxes $302,910 Less: taxes (rate 30%) 90,873 Net profits after taxes $212,037

Allen Products LP, wants to do a scenario analysis for the coming year. The pessimistic prediction for sales is $890,000; the most likely amount of sales is $1,123,000;

and the optimistic prediction is $1,271,000.

Allen's income statement for the most recent year is shown above,

a. Use the percent-of-sales method, the income statement for December 31, 2019 and the sales revenue estimates to develop pessimistic, most likely, and optimistic pro forma income statements for the coming year.

Pro Forma Income Statement

Allen Products, Inc.

for the Year Ended December 31, 2020

Sales:

Less: Cost of goods sold:

Gross profits:

Less: Operating expense:

Operating profits:

Less: Interest expense:

Net profits before taxes:

Taxes (30%):

Net profits after taxes: