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

Income Statements
	Company Name
	Walton				Vernon
Number of customers (a)		80				80
Sales revenue (a $240)	$	19,200			$	19,200
Variable cost (a $185)		N/A				(14,800	)
Variable cost (a $0)		0				N/A
Contribution margin		19,200				4,400
Fixed cost		(14,800	)			0
Net income	$	4,400			$	4,400

Required

1. Reconstruct Waltons income statement, assuming that it serves 160 customers when it lures 80 customers away from Vernon by lowering the sales price to $140 per customer.

2. Reconstruct Vernons income statement, assuming that it serves 160 customers when it lures 80 customers away from Walton by lowering the sales price to $140 per customer.