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 Accounts receivable Inventory (January 1, Year 2) Plant and equipment Accumulated depreciation Accounts payable Notes payable (due within one year) Accrued payables Common stock Retained earnings Sales revenue Other income Manufacturing costs Materials $ 5,900 331,000 330,000 575,000 $ 175,000 191,000 211,000 104,000 390,000 785,400 2,510,000 58,000 955,000 Direct labor 980,000 Variable overhead 627,000 Depreciation 31,000 Other fixed overhead 42,000 Marketing Commissions 102,000 Salaries 75,000 Promotion and advertising 202,000 Administrative Salaries 75,000 Travel 15,500 Office costs 47,000 Income taxes Dividends 31,000 $ 4,424,400 $4,424,400 Adjustments for the change in inventory and for income taxes have not been made. The scheduled production for this year is 425,000 units, and planned sales volume is 375,000 units. Sales and production volume was 275,000 units last year. The company uses a full- absorption costing and FIFO inventory system and is subject to a 40 percent income tax rate. The actual income statement for last year follows: Revenues PANTHER CORPORATION Statement of Income and Retained Earnings For the Budget Year Ended December 31, Year 1 Sales revenue Other income Expenses Cost of goods sold Materials Direct labor Variable overhead Fixed overhead Beginning inventory $ 600,000 641,000 350,000 59,000 $ 1,650,000 330,000 $ 1,980,000 330,000 $ 2,070,000 86,000 $2,156,000 Ending inventory Selling Salaries Commissions Promotion and advertising General and administrative Salaries Travel Office costs $ 1,650,000 $ 65,000 71,000 137,000 273,000 $ 67,000 13,000 43,000 123,000 44,000 2,090,000 66,000 Income taxes Operating profit Beginning retained earnings Subtotal Less dividends Ending retained earnings Required: Prepared a budgeted income statement and balance sheet. 750,400 $ 816,400 31,000 $ 785,400 Budgeted Inc Stmt Budgeted Balance Sheet Prepared a budgeted income statement. (Round "Cost per unit" to 2 decimal places. Do not round any other intermediate calculations.) Revenue: Sales revenue Other income Total Revenue Expenses: PANTHER CORPORATION Budgeted Income Statement For the Year Ended December 31, Year 2 Cost of goods manufactured & sold: Materials Direct labor Variable overhead Fixed overhead Beginning inventory Ending inventory Marketing: Salaries Commissions Promotions and advertising Administrative: Salaries Travel Office costs Income taxes (credit) Total expenses Operating profit (loss) < Budgeted Inc Stmt Budgeted Balance Sheet > Budgeted Inc Stmt Budgeted Balance Sheet Prepared a budgeted balance sheet. (Round "Cost per unit" to 2 decimal places. Do not round any other intermediate calculations.) Current Assets Total current assets Total assets Current liabilities Total current liabilities Shareholders' equity PANTHER CORPORATION Budgeted Balance Sheet Budgeted December 31, Year 2 Total shareholders' equity Total liabilities and shareholders' equity < Budgeted Inc Stmt Budgeted Balance Sheet >