Please show work!

Gulf States Manufacturing has the following data from year 1 operations, which are to be used for developing year 2 budget estimates:

Sales revenues (14,500 units)	$	1,305,000
Manufacturing costs
Materials	$	233,000
Variable cash costs		317,000
Fixed cash costs		126,000
Depreciation (fixed)		156,000
Marketing and administrative costs
Marketing (variable, cash)		160,000
Marketing depreciation		38,000
Administrative (fixed, cash)		152,000
Administrative depreciation	$	14,000
Total costs	$	1,196,000
Operating profits	$	109,000

All depreciation charges are fixed. Old manufacturing equipment with an annual depreciation charge of $14,750 will be replaced in year 2 with new equipment that will incur an annual depreciation charge of $21,200. Sales volume and prices are expected to increase by 10 percent and 4 percent, respectively. On a per-unit basis, expectations are that materials costs will increase by 8 percent and variable manufacturing costs will decrease by 2 percent. Fixed cash manufacturing costs are expected to decrease by 5 percent.

Variable marketing costs will change with volume. Administrative cash costs are expected to increase by 6 percent. Inventories are kept at zero. Gulf States operates on a cash basis.

Required information

Required:

Prepare a budgeted income statement for year 2. (Do not round intermediate calculations.)