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Shaner Company prepared the following budgeted income statement for the first quarter of 2018:

Shaner Company
Budgeted Income Statement
For the Quarter Ended March 31, 2018
			January	February	March	Total
Net Sales Revenue		(20% increase per month)	$25,000	$30,000	$36,000	$91,000
Cost of Goods Sold		(20% of sales)	5,000	6,000	7,200	18,200
Gross Profit			20,000	24,000	28,800	72,800
S and A Expenses		($3,000 + 12% of sales)	6,000	6,600	7,320	19,920
Operating Income			14,000	17,400	21,480	52,880
Income Tax Expense		(20% of operating income)	2,800	3,480	4,296	10,576
Net Income			$11,200	$13,920	$17,184	$42,304

ShanerShaner

Company is considering two options.

1.	Prepare budgeted income statements for both options, assuming both options begin in January and January sales remain $25,000. Round all calculations to the nearest dollar.
2.	Which option should Shaner choose? Explain your reasoning.

Requirement 1. Prepare budgeted income statements for both options, assuming both options begin in

JanuaryJanuary

and

JanuaryJanuary

sales remain

$25,000.

Round all calculations to the nearest dollar.

Begin by preparing the budgeted income statement for Option 1.

option 1 is the only one that is currently shown.

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