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

Income Statements
	Company Name
	Kent			Trent
Number of customers (a)		100			100
Sales revenue (a $250)	$	25,000		$	25,000
Variable cost (a $175)		N/A			(17,500	)
Variable cost (a $0)		0			N/A
Contribution margin		25,000			7,500
Fixed cost		(17,500	)		0
Net income	$	7,500		$	7,500

Required

a.

Reconstruct Kents income statement, assuming that it serves 200 customers when it lures 100 customers away from Trent by lowering the sales price to $150 per customer.

b.	Reconstruct Trents income statement, assuming that it serves 200 customers when it lures 100 customers away from Kent by lowering the sales price to $150 per customer.

KENT Income Statement Sales revenue Variable cost Contribution margin Fixed cost Net income (loss)