Panther Corporation appeared to be experiencing a good year. Sales in the first quarter were one-third ahead of last year, and the sales department predicted that this rate would continue throughout the entire year. The controller asked Janet Nomura, a summer accounting intern, to prepare a draft forecast for the year and to analyze the differences from last year's results. She based the forecast on actual results obtained in the first quarter plus the expected costs of production to be completed in the remainder of the year. She worked with various department heads (production, sales, and so on) to get the necessary information. The results of these efforts follow: PANTHER CORPORATION Expected Account Balances for December 31, Year 2 Cash 6,200 Accounts receivable 334,000 330,000 Inventory (January 1, Year 2) 590,000 Plant and equipment 178,000 Accumulated depreciation Accounts payable 94,000 214,000 Notes payable (due within one year) Accrued payables 107,000 Common stock 420,000 Retained earnings 846.200 2,540,000 Sales revenue Other income 64,000 Manufacturing costs Materials 960,000 Direct labor 988,000 Variable overhead 703,000 34,000 Depreciation 45,000 Other fixed overhead Marketing 108,000 Commissions Salaries 78,000 Promotion and advertising 208,000 Administrative Salaries 78,000 17,000 Travel Office costs 50,000