5.30 (LO 5) Preparing pro-forma financial statements Bill Thomas, Bates & Hills controller, has received all the budgets prepared by the various operating units (see Exercises 5.8, 9, 11, 15, 17, 19, 20, 23, 25, and 29) and is ready to compile the pro-forma financial statements for the first quarter. The companys balance sheet as of December 31 is as follows:

Cash $32,400

Accounts Receivable, net 98,200

Raw Materials Inventory 22,500

Finished Goods Inventory 49,280

Property, Plant, & Equipment 300,000

Accumulated Depreciation (75,000)

Total Assets $427,380

Accounts Payable $18,000

Income Tax Payable 26,400

Common Stock 100,000

Retained Earnings 282,980

Total Liabilities & Owners Equity $427,380

The company expects a 30% income tax rate, and all quarterly taxes are paid in the first month of the following quarter.

Required

a. Prepare Bates & Hills pro-forma income statement for the first quarter.

b. Prepare Bates & Hills pro-forma balance sheet as of March 31.