Bill Thomas, Bates & Hill'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 of December 31 is as follows:
Additional Information:
? Bates & Hill plans to declare and pay dividends totaling $31,360 in January.
? Bates & Hill plans to purchase and pay cash for a piece of land in February at a cost of $46,080.
? Bates & Hill plans to purchase equipment in March at a cost of $38,400.
? Depreciation for manufacturing overhead $19,200 per month and for selling and administrative $6,400 per month.
The company expects a 19% income tax rate, and all quarterly taxes are paid in the first month of the following quarter.
(a) Prepare Bates & Hill's pro-forma income statement for the first quarter.