Pendleton Company, a merchandising company, is developing its master budget for 2015. The income statement for 2014 is as follows:

Pendleton Company Income Statement

For Year Ending December 31, 2014

Gross sales $2,000,000

Less: Estimated uncollectible accounts (40,000)

Net sales 1,960,000 Cost of goods sold (1,100,000)

Gross profit 860,000

Operating expenses (including $25,000 depreciation)(500,000)

Net income$360,000

The following are management's goals and forecasts for 2015:

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.

Complete a budgeted functional income statement for 2015. No negative signswith any of your answers.

Pendleton Company Budgeted Income Statement For the Year Ending December 31, 2015

Sales: ?

Net sales ?

Cost of goods sold ?

Gross profit ?

Operating expenses ?

Net income ?