George Robinson, Marigold & Kenneth'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 as of December 31 is as follows: Cash $32,200 22,500 Finished Goods Inventory Accounts Receivable (net) 98,500 Raw Materials Inventory 49,280 Property, Plant & Equipment 300,000 Accumulated Depreciation (75,000) Total Assets $427,480 Accounts Payable $ 18,000 Income Tax Payable 26,400 Common Stock 100,000 Retained Earnings 283,080 Total Liabilities & Owners Equity $427,480 Selected Estimates Quarter $ 1,779,900 Budgeted revenue Selling and administrative expense 428,700 Interest expense 370 Cash 50,380 Cost of Goods Sold 1,385,630 Accounts receivable (net) 174,720 Direct materials 29,160 Finished goods 104,720 Accounts payable 218,700 Notes payable 5,000 Additional Information: Marigold & Kenneth plans to purchase and pay cash for a piece of land in February at a cost of $ 90,000. Marigold & Kenneth plans to purchase equipment in March at a cost of $ 30,000. Depreciation for manufacturing overhead $ 42,000 per quarter 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. Marigold& Hill Income Statement First Quarter Sales Revenue $ 1779900 Cost of Goods Sold 1385630 i Gross Margin 394270 Selling & Administrative Expense 428700 i Operating Income /(Loss) -34430 Interest Expense 370 i Income Before Taxes