Case 10-59 Sports Fanatic Company is a retail sporting goods store that uses acarual accounting for its records. Information on Sports Fanatic's operations are as follows: 1. The store has budgeted sales at $220,000 for January and $200,000 for February. It expects collections to be 60% in the month of sale and 38% in the month following the sale, It expects 2 of sales to be uncollectible, 3 Gross margin is 25% of sales It purchases a total of 80% of the merchandise for resale in the month before the month of sale 4 and 20% in the month of sales It makes payments for merchandise in the month after it purchases it, 5 Cher expected monthly expenses to be paid in cash amount to $22,600, 6 Annual depreciation is $216,000. 7, Sports Fanatic's balance sheet at the close of business on December 31 follows. SPORTS FANATIC COMPANY Balance Sheet December 31 Assets Cash 22,000 Accounts receivable (net of $4,000 ance for uncollectible accounts 76,000 132,000 ventory Property, plant, and equipment (net of $680,000 of acaumulated depredation) 870,000 Total assets $1,100,000 Liabilities and Shareholders' Equity Accounts payable $162,000 Common shares 800,000 Retained earnings 138,000 Total liabilities and shareholders equity $1. 100,000 Prepare the income statement for January. (Enter negative amounts using either a negative sign preceding the number e.g. 45 orparentheses e.g. (45).) SPORTS FANATIC COMPANY Pro Forma Income Statement For the Month of January