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William Brown, Sheridan & David's controller, has received all the budgets prepared by the various operating units and is ready to compile the pro-forma financial statements for the first quarter. The company's balance sheet as of December 31 is as follows: Cash Finished Goods Inventory Accounts Receivable (net) Raw Materials Inventory Property, Plant & Equipment Accumulated Depreciation $ 33,000 22,500 98,000 49,280 300,000 (75,000) $427,780 Total Assets Accounts Payable Income Tax Payable Common Stock Retained Earnings Total Liabilities & Owners Equity $ 17,000 26,400 100,000 284,380 $427,780 Selected Estimates Budgeted revenue Selling and administrative expense Interest expense Cash Cost of Goods Sold Accounts receivable (net) Direct materials Finished goods Accounts payable Notes payable Quarter $1,784,600 428,700 370 50,380 1,389,630 174,720 29,160 104,720 218,700 3,000 Additional Information: Sheridan & David plans to purchase and pay cash for a piece of land in February at a cost of $90,000. Sheridan & David plans to purchase equipment in March at a cost of $30,000. Depreciation for manufacturing overhead $42,000 per quarter and for selling and administrative $30,000 per month. The company expects a 30% income tax rate, and all quarterly taxes are paid in the first month of the following quarter. Prepare Sheridan & David's pro-forma income statement for the first quarter. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Sheridan & Hill Income Statement First Quarter Sales Revenue $ 1,784,600 Cost of Goods Sold 1,389,630 i Gross Margin 3,174,230 Selling & Administrative Expense 428,700 i Operating Income /(Loss) Interest Expense Income Before Taxes Income Tax Expense 0 Net Income /(Loss) $