In the fourth quarter of 2023, Daisy's Doodle Maker had the following net income:

Sales $500,000

Less variable cost of sales:

Materials 100,000

Labor and Overhead 50,000

Contribution margin 350,000

Fixed Production and SG&A costs 150,000

Income before taxes 200,000

Income taxes 80,000

Net income $120,000

• Sales and Variable Cost of Sales are increasing by 10% in Q1 2024
• Taxes are 40 percent of pretax income and are paid in the quarter incurred.
• Sixty percent of sales are collected in the quarter of sale and 40 percent in the next quarter.
• Seventy percent of material purchases are paid in the quarter of purchase and 30 percent in the next quarter.
• Labor and overhead are paid for in the quarter the expenses are incurred.
• Fixed Production and SG&A costs are anticipated to increase by 5%, other than the $10,000 of depreciation costs, which will remain the same in Q1 2024.
• Fixed Production and SG&A costs, other than depreciation, are paid in the quarter incurred.
• No purchases of capital equipment are planned in Q1 2014.
• The cash balance at the end of 2023 was $50,000.

Required:

1. Prepare a budgeted income statement for Q1 2024.
2. Prepare a cash budget for Q1 2024.