Exercise 5-30 (Part Level Submission) Bill Thomas, Bates & Hills 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 companys balance sheet of December 31 is as follows:

Cash	$ 48,000
Accounts Receivable (net)	46,800
Finished Goods Inventory	39,200
Raw Materials Inventory	6,048
Property, Plant & Equipment	240,000
Accumulated Depreciation	(60,000	)
Total Assets	$320,048
Accounts Payable	$ 14,400
Income Tax Payable	60,208
Common Stock	80,000
Retained Earnings	165,440
Total Liabilities & Owners Equity	$320,048

Quarter
Budgeted revenue	$1,128,000
Selling and administrative expense	213,120
Interest expense	2,704
Cash	24,620
Cost of Goods Sold	802,696
Accounts receivable	109,200
Direct materials	4,448
Finished goods	47,212
Acounts payable	26,560
Notes payable	32,800

Additional Information:

	Bates & Hill plans to declare and pay dividends totaling $39,200 in January.
	Bates & Hill plans to purchase and pay cash for a piece of land in February at a cost of $57,600.
	Bates & Hill plans to purchase equipment in March at a cost of $48,000.
	Depreciationfor manufacturing overhead$24,000 per month andfor selling and administrative $8,000 per month.

The company expects a 24% income tax rate, and all quarterly taxes are paid in the first month of the following quarter.

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

Pro-forma Income Statement
Selling & Administrative ExpenseSales RevenueCost of Goods SoldInterest ExpenseIncome Before TaxesIncome Tax Expense	$
Cost of Goods SoldSales RevenueSelling & Administrative ExpenseInterest ExpenseIncome Before TaxesIncome Tax Expense
Net Income / (Loss)Gross MarginNon-Operating ExpensesOperating Income / (Loss)Non-Operating Income / (Loss)
Interest ExpenseIncome Tax ExpenseSales RevenueCost of Goods SoldSelling & Administrative ExpenseIncome Before Taxes
Non-Operating Income / (Loss)Non-Operating ExpensesGross MarginNet Income / (Loss)Operating Income / (Loss)
Sales RevenueInterest ExpenseIncome Tax ExpenseCost of Goods SoldSelling & Administrative ExpenseIncome Before Taxes
Cost of Goods SoldSelling & Administrative ExpenseIncome Before TaxesInterest ExpenseIncome Tax ExpenseSales Revenue
Selling & Administrative ExpenseSales RevenueInterest ExpenseCost of Goods SoldIncome Before TaxesIncome Tax Expense
Gross MarginNon-Operating Income / (Loss)Operating Income / (Loss)Net Income / (Loss)Non-Operating Expenses	$

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(b) The parts of this question must be completed in order. This part will be available when you complete the part above.