Motors is a chain of car dealerships. Sales in the fourth quarter of last year were

$3,800,000.

Suppose management projects that its current year's quarterly sales will increase by

5%

in quarter 1, by another

6%

in quarter 2, by another

2%

in quarter 3, and by another

3%

in quarter 4. Management expects cost of goods sold to be

55%

of revenues every quarter, while operating expenses should be

20%

of revenues during each of the first two quarters,

30%

of revenues during the third quarter, and

35%

during the fourth quarter.

Requirement

Prepare a budgeted income statement for each of the four quarters and for the entire year.

Prepare the first portion of the budgeted income statement through gross profit, then complete the statement. (Round the amounts to the nearest whole dollar.)

Monette Motors
Budgeted Income Statement
For the Upcoming Year
	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Year
Sales	$3,990,000	$4,229,400	$4,313,988	$4,443,408	$16,976,796
Less: Cost of goods sold	2,194,500	2,326,170	2,372,693	2,443,874	9,337,237
Gross profit	1,795,500	1,903,230	1,941,295	1,999,534	7,639,559

Less: Operating expenses
Net income