Question $4$ Partially correct Mark $2\mathrm{.}50$ out of $10\mathrm{.}00,$ P Flag question

Prepare and Evaluate Budgeted Income Statement

Fairfield Stores, a retailer in a shopping mall, prepared the following income statement for its operations for the month just ended:

Sales commissions were $15\%$ of sales. Income taxes were $40\%$ of income before income taxes. Both should continue at the same rate for the remainder of the year.

Increase advertising expense by $40\%.$

Decrease all selling prices by $10\%.$

Increase the number of units sold by $25\%$ as a result of the first two changes.

a$.$ Prepare a budgeted income statement for the month of May. Round all amounts on the

income statement to the nearest dollar.

b$.$ Complete the following statement: