Budgeted Income Statement

Quality Wool Company, a merchandising company, is developing its master budget for $2018.$ The income statement for $2017$ is as follows:

The following are management's goals and forecasts for $2018$:

Selling prices will increase by $6$ percent, and sales volume will increase by $4$ percent.

The cost of merchandise will increase by $3$ percent.

All operating expenses are fixed and are paid in the month incurred. Price increases for operating expenses will be $10$ percent. The company uses straight$-$line depreciation.

The estimated uncollectibles are $2$ percent of budgeted sales.

Required

Prepare a budgeted functional income statement for $2018.$

Do not use negative signs with any of your answers.