Budgeted Income Statement Quality Wool Company, a merchandising company, is developing its master budget for next year. The income statement for the current year is as follows:

Quality Wool Company Income Statement For Year Ending December 31
Gross sales	$1,200,000
Less uncollectible accounts	26,000
Collected sales	1,174,000
Cost of goods sold	780,000
Profit before operating expense	394,000
Operating expenses (including $15,000 depreciation)	206,000
Income before tax	$188,000

The following are management's goals and forecasts for next year:

1.	Selling prices will increase by 3%, and sales volume will increase by 5%.
2.	The cost of merchandise will increase by 2%.
3.	All operating expenses are fixed. Price increases for operating expenses will be 4%. The company uses straight-line depreciation.
4.	The estimated uncollectibles are 2% of budgeted sales.

Required Conduct a budgeted functional income statement for next year.

Do not use negative signswith any of your answers.

Quality WoolCompany Budgeted Income Statement For the Year Ending December 31
Sales	Answer
Less uncollectible accounts	Answer
Collected sales	Answer
Cost of goods sold	Answer
Profit before operating expense	Answer
Operating expenses	Answer
Income before tax	Answer