(Pro forma income statement) The following budget information is available for Global Company for May.

• Sales are expected to be $400,000. All sales are on account, and a provi¬ sion for bad debts is made monthly at 2.5 percent of sales.

• Inventory was $35,000 on April 30 and an increase of $10,000 is planned for May.

• All inventory is marked to sell at cost plus 60 percent.

• Estimated cash disbursements for selling and administrative expenses for the month are $55,000.

• Depreciation for May is projected at $8,000.

Prepare a pro forma income statement for Global Co. for May.

(CPA adapted)

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