Panther Corporation appeared to be experiencing a good year. Sales in the first quarter were one-third ahead of last year, and the sales department predicted that this rate would continue throughout the entire year. The controller asked Janet Nomura, a summer accounting intern, to prepare a draft forecast for the year and to analyze the differences from last year's results. She based the forecast on actual results obtained in the first quarter plus the expected costs of production to be completed in the remainder of the year. She worked with various department heads (production, sales, and so on) to get the necessary information. The results of these efforts follow: PANTHER CORPORATION
Expected Account Balances for December 31, Year 2
Cash $ 5,100
Accounts receivable 323,000
Inventory (January 1, Year 2) 200,000
Plant and equipment 535,000
Accumulated depreciation $ 167,000
Accounts payable 183,000
Notes payable (due within one year) 203,000
Accrued payables 96,000
Common stock 310,000
Retained earnings 541,600
Sales revenue 2,430,000
Other income 42,000
Manufacturing costs
Materials 900,000
Direct labor 950,000
Variable overhead 523,000
Depreciation 23,000
Other fixed overhead 34,000
Marketing
Commissions 86,000
Salaries 67,000
Promotion and advertising 186,000
Administrative
Salaries 67,000
Travel 11,500
Office costs 39,000
Income taxes —
Dividends 23,000
$ 3,972,600 $ 3,972,600

Adjustments for the change in inventory and for income taxes have not been made. The scheduled production for this year is 450,000 units, and planned sales volume is 410,000 units. Sales and production volume was 310,000 units last year. The company uses a full-absorption costing and FIFO inventory system and is subject to a 40 percent income tax rate. The actual income statement for last year follows:

PANTHER CORPORATION
Statement of Income and Retained Earnings
For the Budget Year Ended December 31, Year 1
Revenues
Sales revenue $ 1,930,000
Other income 66,000 $ 1,996,000
Expenses
Cost of goods sold
Materials $ 570,000
Direct labor 582,000
Variable overhead 347,000
Fixed overhead 51,000
$ 1,550,000
Beginning inventory 200,000
$ 1,750,000
Ending inventory 200,000 $ 1,550,000
Selling
Salaries $ 57,000
Commissions 63,000
Promotion and advertising 129,000 249,000
General and administrative
Salaries $ 64,000
Travel 8,000
Office costs 35,000 107,000
Income taxes 36,000 1,942,000
Operating profit 54,000
Beginning retained earnings 510,600
Subtotal $ 564,600
Less dividends 23,000
Ending retained earnings $ 541,600
Required:

Prepared a budgeted income statement and balance sheet.