The following income statements illustrate different cost structures for two competing $$companies$.$

Income Statements

Company Name

Hill Creek

Number of customers $($a$)200200$

Sales revenue $($a $\backslash$times $$200)$ $ $40,000$ $ $40,000$

Variable cost $($a $\backslash$times $$140)$ N$/$A $(28,000)$

Variable cost $($a $\backslash$times $$0)0$ N$/$A

Contribution margin $40,00012,000$

Fixed cost $(28,000)0$

Net income $ $12,000$ $ $12,000$

Required

Reconstruct Hill$$s income statement, assuming that it serves $400$ customers when it lures $200$ customers away from Creek by lowering the sales price to $$120$ per customer.

Reconstruct Creek$$s income statement, assuming that it serves $400$ customers when it lures $200$ customers away from Hill by lowering the sales price to $$120$ per customer.