Daniel Jackson, Waterway & Paul's controller, has received all the budgets prepared by the various operating units and is ready to compile the pro-forma financial statements for the first quarter. The company's balance sheet of December 31 is as follows: Cash Accounts Receivable (net) Finished Goods Inventory Raw Materials Inventory Property, Plant & Equipment Accumulated Depreciation Total Assets Accounts Payable Income Tax Payable Common Stock Retained Earnings Total Liabilities & Owners Equity $ 32,400 22,500 98,700 49.280 300,000 (75,000) $427,880 $ 17,000 26,400 100,000 284,480 $427,880 Selected Estimates Budgeted revenue Selling and administrative expense Interest expense Quarter $1,783.500 428.700 370 Selected Estimates Budgeted revenue Selling and administrative expense Interest expense Cash Cost of Goods Sold Accounts receivable (net) Direct materials Finished goods Accounts payable Notes payable Quarter $1,783,500 428,700 370 50,380 1,388,630 174,720 29,160 104,720 218,700 3,000 Additional Information: . Waterway & Paul plans to declare and pay dividends totaling $48,000 in January Waterway & Paul plans to purchase and pay cash for a piece of land in February at a cost of $90,000. Waterway & Paul plans to purchase equipment in March at a cost of $30,000. Depreciation for manufacturing overhead $42,000 per month and for selling and administrative $30,000 per month. The company expects a 30% income tax rate, and all quarterly taxes are paid in the first month of the following quarter. Prepare Waterway & Paul's pro-forma income statement for the first quarter. (Enter negative amounts using either a negative sign preceding the number e.3.-45 or parentheses es. (45).) Waterway& Hill Income Statement First Quarter Sales Revenue 1783500 Cost of Goods Sold 1388630 Gross Margin 394870 Selling & Administrative Expense 428700 Operating Income /(Loss) -33830 Interest Expense 370 i Income Before Taxes - 34200 Income Tax Expense Net Income /(Loss) $ -34200 TE Waterway& Hill Balance Sheet March 31 Cash $ 50380 Accounts Receivable 174720 Finished Goods Inventory 104720 Raw Materials Inventory 29160 Property. Plant & Equipment 420000 Accumulated Depreciation 129000 Total Assets $ 907980 Accounts Payable 218700 Note Payable 3000 Taxes Payable 26400 Common Stock 100000 Retained Earnings 332480 Total Liabilities and Equities