Posh International, Inc., is an exotic car dealership. Suppose that its Los Angeles office projects that 2011 quarterly sales will increase by 3% in Quarter 1, by 4% in Quarter 2, by 6% in Quarter 3, and by 5% in Quarter 4. Management expects operating expenses to be 80% of revenues during each of the first two quarters, 79% of revenues during the third quarter, and 81% during the fourth. The office manager expects to borrow \($500,000\) on July 1, with quarterly principal payments of \($10,000\) beginning on September 30 and interest paid at an annual rate of 14%. Assume that fourth-quarter 2010 sales were $7,000,000.

Requirement 

1. Prepare a budgeted income statement for each of the four quarters of 2011 and for the entire year. Present the 2011 budget as follows:

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Quarter 1 Quarter 2 Quarter 3 Quarter 4 Full Year