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After CingO 120 sts, the instructions say "work in 1x1 rib for 2" increasing 12sts evenly across last round."
So yes, I would do a kfb into a knit stitch every 10 sts to increase to 132 as you said. Then follow the pattern from there.
You then go on to work in pattern, so those increases in the last row of ribbing won't be too visible as to throw off the appearance of the ribbing.
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