City Motors is a chain of car dealerships. Sales in the fourth quarter of last year were $4,000,000. Suppose its management projects that its current year's quarterly sales will increase by 3% in quarter 1, by another 7% in quarter 2, by another 6% in quarter 3, and by another 5% in quarter 4. Management expects cost of goods sold to be 55% of revenues every quarter, while operating expenses should be 20% of revenues during each of the first two quarters, 35% of revenues during the third quarter, and 25% during the fourth quarter.
Requirement
Prepare a budgeted income statement for each of the four quarters and for the entire year.