I. Barrett Company has completed all operating budgets other the income statement for 2017.

Selected data from these budgets follows.

Sales revenue: $300,000

Purchases of raw materials: $145,000

Ending inventory of raw materials: $15,000

Direct labor: $40,000

Interest expense: $1,000

Principal payment on note: $2,000

Dividends declared: $2,000

Income tax rate: 30%

Manufacturing overhead: $73,000, including $3,000 of depreciation expense

Selling and administrative expenses: $36,000 including depreciation expenses of $1,000

Other information:

Assume that the number of units produced equals the number sold.

Tear-end accounts receivable: 4% of 2017 sales.

Year-end accounts payable: 50% of ending inventory of raw materials.

Interest, direct labor, manufacturing overhead, and selling and administrative expenses other

than depreciation are paid as incurred. Dividends declared and income taxes for 2017 will not

be paid until 2018.