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: Cash PANTHER CORPORATION Expected Account Balances for December 31, Year 2 $ 6,200 Accounts receivable 334,000 Inventory (January 1, Year 2) 330,000 Plant and equipment 590,000 Accumulated depreciation $ 178,000 Accounts payable 194,000 Notes payable (due within one year) 214,000 Accrued payables 107,000 Common stock 420,000 Retained earnings 846,200 Sales revenue 2,540,000 Other income 64,000 Manufacturing costs Materials 960,000 Direct labor 988,000 Variable overhead 703,000 Depreciation 34,000 Other fixed overhead 45,000 Marketing Commissions 108,000 Salaries 78,000 Promotion and advertising 208,000 Administrative Salaries 78,000 Travel 17,000 Office costs 50,000 Income taxes Dividends 34,000 $ 4,563,200 $4,563,200 Adjustments for the change in inventory and for income taxes have not been made. The scheduled production for this year is 420,000 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: $2,180,000 PANTHER CORPORATION Statement of Income and Retained Earnings For the Budget Year Ended December 31, Year 1 Revenues Sales revenue $ 2,090,000 Other income 90,000 Expenses Cost of goods sold Materials $ 624,000 Direct labor 636,000 Variable overhead 328,000 Fixed overhead 62,000 $ 1,650,000 Beginning inventory 330,000 $ 1,980,000 Ending inventory 330,000 $ 1,650,000 Selling Salaries $ 68,000 Commissions 74,000 Promotion and advertising 140,000 282,000 General and administrative Salaries $ 70,000 Travel 14,500 Office costs 46,000 130,500 Income taxes 47,000 Operating profit Beginning retained earnings Subtotal Less dividends Ending retained earnings 2,109,500 70,500 809,700 $ 880,200 34,000 $ 846,200 Required: Prepared a budgeted income statement and balance sheet. 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.) PANTHER CORPORATION Budgeted Income Statement For the Year Ended December 31, Year 2 Revenue: Sales revenue Other income Total Revenue Expenses: 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 Prepared a budgeted balance sheet. (Round "Cost per unit" to 2 decimal places. Do not round any other intermediate calculations.) PANTHER CORPORATION Budgeted Balance Sheet Budgeted December 31, Year 2 Current Assets Total current assets Total assets Current liabilities Total current liabilities Shareholders' equity Total shareholders' equity Total liabilities and shareholders' equity