Calgary Industries is preparing a budgeted income statement for 2018 and has accumulated the following information. Predicted sales for the year are $700,000 and cost of goods sold is 40% of sales. The expected selling expenses are $78,000 and the expected general and administrative expenses are $87,000, which includes $20,000 of depreciation. The company's income tax rate is 30%. The budgeted net income for 2018 is:

Multiple Choice

• $420,000.
• $178,500.
• $255,000.
• $85,100.
• $76,500.