Dalley Inc. has the following information for its first year of operations:

Revenues (200,000 units)	$	2,900,000
Manufacturing costs:
Materials	$	168,000
Variable cash costs		142,400
Fixed cash costs		327,600
Depreciation (fixed)		999,000
Marketing (variable)		422,400
Marketing depreciation		149,600
Administrative (fixed)		509,200
Administrative depreciation		74,800
Total costs	$	2,793,000
Operating profits	$	107,000

All depreciation charges are fixed and are expected to remain the same for year 2. Sales volume is expected to increase by 15%, but sales prices are expected to fall by 5%. Material costs per unit are expected to decrease by 6%. Other unit variable manufacturing costs are expected to decrease by 2% per unit. Fixed manufacturing costs (other than depreciation) are expected to increase by 5%.

Variable marketing costs per unit will remain constant. Administrative costs (other than depreciation) are expected to increase by 10%.

Assume there are no inventories. Dalley operates on a cash basis.

Required:

Prepare a budgeted income statement for year 2.