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	$	5,600
Accounts receivable		328,000
Inventory (January 1, Year 2)		300,000
Plant and equipment		560,000
Accumulated depreciation				$	172,000
Accounts payable					188,000
Notes payable (due within one year)					208,000
Accrued payables					101,000
Common stock					360,000
Retained earnings					514,600
Sales revenue					2,480,000
Other income					52,000
Manufacturing costs
Materials		831,000
Direct labor		881,000
Variable overhead		581,000
Depreciation		28,000
Other fixed overhead		39,000
Marketing
Commissions		96,000
Salaries		72,000
Promotion and advertising		196,000
Administrative
Salaries		72,000
Travel		14,000
Office costs		44,000
Income taxes
Dividends		28,000
	$	4,075,600		$	4,075,600

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:

PANTHER CORPORATION Statement of Income and Retained Earnings For the Budget Year Ended December 31, Year 1
Revenues
Sales revenue				$	1,900,000
Other income					80,000		$	1,980,000
Expenses
Cost of goods sold
Materials	$	540,000
Direct labor		552,000
Variable overhead		352,000
Fixed overhead		56,000
	$	1,500,000
Beginning inventory		300,000
	$	1,800,000
Ending inventory		300,000		$	1,500,000
Selling
Salaries	$	62,000
Commissions		68,000
Promotion and advertising		134,000			264,000
General and administrative
Salaries	$	64,000
Travel		9,500
Office costs		40,000			113,500
Income taxes					41,000			1,918,500
Operating profit								61,500
Beginning retained earnings								481,100
Subtotal							$	542,600
Less dividends								28,000
Ending retained earnings							$	514,600

Required:

Prepared a budgeted income statement and balance sheet.