Pendleton Company Income Statement For Year Ending December 31, 2014 Gross sales Less uncollectible accounts $3,500,000 70,000 Collected sales Cost of goods sold 3,430,000 1,925,000 Profit before operating expense 1,505,000 Operating expenses (including $25,000 depreciation) 875,000 Income before tax $630,000 The following are management's goals and forecasts for 2015: 1. Selling prices will increase by 6 percent, and sales volume will increase by 4 percent. 2. The cost of merchandise will increase by 3 percent. 3. All operating expenses are fixed and are paid in the month incurred. Price increases for operating expenses will be 10 percent. The company uses straight-line depreciation. 4. The estimated uncollectibles are 2 percent of budgeted sales. Required Prepare a budgeted functional income statement for 2015. Do not use negative signs with any of your answers. Sales Pendleton Company Budgeted Income Statement For the Year Ending December 31, 2015 Less uncollectible accounts Collected sales Cost of goods sold $ 1,653,600 x 33,072 x 1,620,528 x 883,740 x Profit before operating expense Operating expenses Income before tax 736,788 x 410,000 * $ 326,788 *