William Brown, Sheridan & Davids 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 companys balance sheet as of December 31 is as follows:

Cash		$ 33,000
Finished Goods Inventory		22,500
Accounts Receivable (net)		98,000
Raw Materials Inventory		49,280
Property, Plant & Equipment		300,000
Accumulated Depreciation		(75,000)
Total Assets		$427,780
Accounts Payable		$ 17,000
Income Tax Payable		26,400
Common Stock		100,000
Retained Earnings		284,380
Total Liabilities & Owners Equity		$427,780

Selected Estimates		Quarter
Budgeted revenue		$1,784,600
Selling and administrative expense		428,700
Interest expense		370
Cash		50,380
Cost of Goods Sold		1,389,630
Accounts receivable (net)		174,720
Direct materials		29,160
Finished goods		104,720
Accounts payable		218,700
Notes payable		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.

(a)

Prepare Sheridan & Davids pro-forma income statement for the first quarter.