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 $ 6,300 Accounts receivable 335,000 Inventory (January 1, Year 2) 300,000 Plant and equipment 595,000 Accumulated depreciation $ 179,000 Accounts payable 195,000 Notes payable (due within one year) 215,000 Accrued payables 108,000 Common stock 430,000 Retained earnings 714,800 Sales revenue 2,550,000 Other income 66,000 Manufacturing costs Materials 924,000 Direct labor 989,000 Variable overhead 646,000 Depreciation 35,000 Other fixed overhead 46,000 Marketing Commissions 110,000 Salaries 79,000 Promotion and advertising 210,000 Administrative Salaries 79,000 Travel 17,500 Office costs 51,000 Income taxes Dividends 35,000 $4,457,800 $4,457,800 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 350,000 units. Sales and production volume was 250,000 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: $2,039,000 PANTHER CORPORATION Statement of Income and Retained Earnings For the Budget Year Ended December 31, Year 1 Revenues Sales revenue $1,950,000 Other income 89,000 Expenses Cost of goods sold Materials 556,000 Direct labor 580,000 Variable overhead 301,000 Fixed overhead 63,000 $1,500,000 Beginning inventory 300,000 $1,800,000 Ending inventory 300,000 $1,500,000 Selling Salaries $ 69,000 Commissions 75,000 Promotion and advertising 141,000 285,000 General and administrative Salaries $ 71,000 Travel 16,000 Office costs 47,000 134,000 Income taxes 48,000 Operating profit Beginning retained earnings Subtotal Less dividends Ending retained earnings 1,967,000 72,000 677,800 $ 749,800 35,000 $ 714,800 PANTHER CORPORATION Budgeted Income Statement For the Year Ended December 31, Year 2 Revenue: $ 2,550,000 66,000 $ 2,616,000 Sales revenue Other income Total Revenue Expenses: Cost of goods manufactured & sold: Materials Direct labor Variable overhead Fixed overhead 924,000 989,000 646,000 Beginning inventory 300,000 300,000 Ending inventory Marketing: Salaries Commissions Promotions and advertising Administrative: Salaries Travel Office costs $ 79,000 110,000 210,000 $ 79,000 17,500 51,000 $ 79,000 110,000 210,000 Ending inventory Marketing: Salaries Commissions Promotions and advertising Administrative: Salaries Travel Office costs Income taxes (credit) Total expenses Operating profit (loss) $ 79,000 17,500 51,000 $ 2,616,000 (Enter all the values as positive values.) Answer is not complete. PANTHER CORPORATION Budgeted Balance Sheet Budgeted December 31, Year 2 Current Assets Cash $ 6,300 Accounts receivable 335,000 Inventory Inventory Income tax receivable $ 341,300 0 $ 341,300 Total current assets Plant and equipment Accumulated depreciation Total assets Current liabilities Accounts payable Accrued payable Notes payable $ 0 Total current liabilities Shareholders' equity Common stock Retained earnings 0 Total shareholders' equity Total liabilities and shareholders' equity $ 0