Budgeted Income Statement Pendleton Company, a merchandising company, is developing its master budget for the year. The income statement for the prior year is as follows:

Pendleton Company Income Statement For Year Ending December 31, Prior Year
Gross sales	$3,500,000
Less uncollectible accounts	70,000
Collected sales	3,430,000
Cost of goods sold	1,925,000
Profit before operating expense	1,505,000
Operating expenses (including $25,000 depreciation)	875,000
Income before tax	$630,000

The following are managements goals and forecasts for the year:

1.	Selling prices will increase by 6 percent, and sales volume will increase by 4 percent.
2.	The cost of merchandise will increase by 3 percent.
3.	All operating expenses are fixed and are paid in the month incurred. Price increases for operating expenses will be 10 percent. The company uses straight-line depreciation.
4.	The estimated uncollectibles are 2 percent of budgeted sales.

Required Prepare a budgeted functional income statement for the year.

Do not use negative signs with any of your answers.

Pendleton Company Budgeted Income Statement For the Year Ending December 31
Sales	Answer
Less uncollectible accounts	Answer
Collected sales	Answer
Cost of goods sold	Answer
Profit before operating expense	Answer
Operating expenses	Answer
Income before tax	Answer