1) Make a budgeted income statement.

CP 6-4 Communication Suzi Nomro operates Watercraft Supply Company, an online boat parts distributorship that is in its third year of operation. The following income statement was prepared for the year ended October 31, 2019. Communication Watercraft Supply Company Income Statement For the Year Ended October 31, 2019 Revenues: Sales Interest Total revenues Expenses: Cost of merchandise sold Selling expenses Administrative expenses Interest expense... Total expenses. Net Income $1,350,000 15,000 $1.365.000 5810.000 140,000 90,000 4,000 1,044,000 321,000 Suzi is considering a proposal to increase net income by offering sales discounts of 2/15, n/30 and by shipping all merchandise FOB shipping point. Currently, no sales dis- counts are allowed and merchandise is shipped FOB destination. It is estimated that the new terms will increase sales by 10%. The ratio of the cost of merchandise sold to sales is expected to be 60%. All selling and administrative expenses are expected to remain unchanged, except for store supplies and miscellaneous selling expenses, which are ex. pected to increase proportionately with increased sales. The amounts of these items for the year ended October 31, 2019. were as follows: Noe sono les expense $12,000 Miscellato se ling expenses 6,000 The interest revenue and expenseite as will remain unchanged. The shipment of all merchandise FOB shipping point will eliminate all delivery expenses, which for the year ended October 31, 2019, were $12,000. (Continued)