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	$	6,400
Accounts receivable		336,000
Inventory (January 1, Year 2)		312,000
Plant and equipment		600,000
Accumulated depreciation				$	180,000
Accounts payable					196,000
Notes payable (due within one year)					216,000
Accrued payables					109,000
Common stock					440,000
Retained earnings					755,400
Sales revenue					2,560,000
Other income					68,000
Manufacturing costs
Materials		950,000
Direct labor		990,000
Variable overhead		657,000
Depreciation		36,000
Other fixed overhead		47,000
Marketing
Commissions		112,000
Salaries		80,000
Promotion and advertising		212,000
Administrative
Salaries		80,000
Travel		18,000
Office costs		52,000
Income taxes
Dividends		36,000
	$	4,524,400		$	4,524,400

Adjustments for the change in inventory and for income taxes have not been made. The scheduled production for this year is 400,000 units, and planned sales volume is 360,000 units. Sales and production volume was 260,000 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:

PANTHER CORPORATION Statement of Income and Retained Earnings For the Budget Year Ended December 31, Year 1
Revenues
Sales revenue				$	2,010,000
Other income					96,000		$	2,106,000
Expenses
Cost of goods sold
Materials	$	550,000
Direct labor		600,000
Variable overhead		346,000
Fixed overhead		64,000
	$	1,560,000
Beginning inventory		312,000
	$	1,872,000
Ending inventory		312,000		$	1,560,000
Selling
Salaries	$	70,000
Commissions		76,000
Promotion and advertising		142,000			288,000
General and administrative
Salaries	$	72,000
Travel		15,500
Office costs		48,000			135,500
Income taxes					49,000			2,032,500
Operating profit								73,500
Beginning retained earnings								717,900
Subtotal							$	791,400
Less dividends								36,000
Ending retained earnings							$	755,400

Required:

Prepared a budgeted income statement and balance sheet.