2) Greenhill Company's balance sheet as of December 31, Year 1is provided below:

Greenhill Company
Balance Sheet
December 31,2013
Assets
Cash	$	35,000
Account receivable		40,000
Inventory		25,000
Plant and equipment, net of depreciation		300,000
Total assets	$	400,000
Liabilities and stockholders' equity
Accounts payable	$	30,000
Notes payable		50,000
Capital stock, no par		200,000
Retained earnings		120,000
Total liabilities and stock	$	400,000

In anticipation of preparing the company's operating budget for the upcoming period, the company's accountant has gathered the following information:

(a) December Year 1sales were $220,000. Sales are expected to grow at a rate of 8% per month. Half of all sales are for cash and half are on account.

(b) Inventory purchases are expected to total $100,000 during January and the inventory account is expected to have a $28,000 balance at January 31, Year 2. All inventory purchases are on account.

(c) Selling and administrative expenses for JanuaryYear 2 are budgeted at $60,000 (exclusive of depreciation) plus 10% of sales. Selling and administrative expenses are paid in cash. Depreciation is budgeted at $3,000 for the month.

(d) The notes payable will be paid in January, Year 2. The amount due will be $50,500. The $500 represents interest expense for the month of January, Year 2.

(e) The company expects to purchase a new machine during January Year 2 at a cost of $5,000.

Required:

Prepare a budgeted income statement for the month of January Year 2. Use the traditional income statement format and ignore income taxes.