LO3 E22-32. Budgeted Income Statement Homework Quality Wool Company, anperchandising company, is developing its master budget for next year. The income statement for the current year is as follows: MBC 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 Prepare a budgeted functional income statement for next year