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: Prepare a budgeted income statement and balance sheet using Excel template.