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Gulf States Manufacturing has the following data from year 1 operations, which are to be used for developing year 2 budget estimates:

Sales revenues (22,000 units)	$	1,980,000
Manufacturing costs
Materials	$	353,000
Variable cash costs		483,000
Fixed cash costs		195,000
Depreciation (fixed)		239,000
Marketing and administrative costs
Marketing (variable, cash)		256,000
Marketing depreciation		63,000
Administrative (fixed, cash)		252,000
Administrative depreciation	$	22,000
Total costs	$	1,863,000
Operating profits	$	117,000

All depreciation charges are fixed. Old manufacturing equipment with an annual depreciation charge of $16,550 will be replaced in year 2 with new equipment that will incur an annual depreciation charge of $23,000. Sales volume and prices are expected to increase by 13 percent and 7 percent, respectively. On a per-unit basis, expectations are that materials costs will increase by 11 percent and variable manufacturing costs will decrease by 3 percent. Fixed cash manufacturing costs are expected to decrease by 8 percent.

Variable marketing costs will change with volume. Administrative cash costs are expected to increase by 9 percent. Inventories are kept at zero. Gulf States operates on a cash basis.

Required: Prepare a budgeted income statement for year 2. (Do not round GULF STATES MANUFACTURING Budgeted Income Statement For Year2 Manufacturing costs Total manufacturing costs Marketing and administrative costs: 0 Total marketing and administrative costs Total costs 0 0